Correlation Between CNH Industrial and SL Green
Can any of the company-specific risk be diversified away by investing in both CNH Industrial and SL Green at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining CNH Industrial and SL Green into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNH Industrial NV and SL Green Realty, you can compare the effects of market volatilities on CNH Industrial and SL Green and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in CNH Industrial with a short position of SL Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNH Industrial and SL Green.
Diversification Opportunities for CNH Industrial and SL Green
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CNH and SLG is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding CNH Industrial NV and SL Green Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SL Green Realty and CNH Industrial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on CNH Industrial NV are associated (or correlated) with SL Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SL Green Realty has no effect on the direction of CNH Industrial i.e., CNH Industrial and SL Green go up and down completely randomly.
Pair Corralation between CNH Industrial and SL Green
Considering the 90-day investment horizon CNH Industrial NV is expected to generate 1.24 times more return on investment than SL Green. However, CNH Industrial is 1.24 times more volatile than SL Green Realty. It trades about 0.17 of its potential returns per unit of risk. SL Green Realty is currently generating about 0.19 per unit of risk. If you would invest 1,009 in CNH Industrial NV on August 31, 2024 and sell it today you would earn a total of 245.00 from holding CNH Industrial NV or generate 24.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNH Industrial NV vs. SL Green Realty
Performance |
| Timeline |
| CNH Industrial NV |
| SL Green Realty |
CNH Industrial and SL Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNH Industrial and SL Green
The main advantage of trading using opposite CNH Industrial and SL Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNH Industrial position performs unexpectedly, SL Green can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in SL Green will offset losses from the drop in SL Green's long position.| CNH Industrial vs. Mativ Holdings | CNH Industrial vs. Hudson Technologies | CNH Industrial vs. Origin Materials | CNH Industrial vs. Avient Corp |
| SL Green vs. Boston Properties | SL Green vs. Alexandria Real Estate | SL Green vs. Hudson Pacific Properties | SL Green vs. Office Properties Income |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |