Correlation Between CNH Industrial and AT S
Can any of the company-specific risk be diversified away by investing in both CNH Industrial and AT S 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 AT S 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 AT S Austria, you can compare the effects of market volatilities on CNH Industrial and AT S 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 AT S. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNH Industrial and AT S.
Diversification Opportunities for CNH Industrial and AT S
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between CNH and ATS is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding CNH Industrial NV and AT S Austria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AT S Austria 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 AT S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AT S Austria has no effect on the direction of CNH Industrial i.e., CNH Industrial and AT S go up and down completely randomly.
Pair Corralation between CNH Industrial and AT S
Assuming the 90 days trading horizon CNH Industrial NV is expected to under-perform the AT S. But the stock apears to be less risky and, when comparing its historical volatility, CNH Industrial NV is 1.7 times less risky than AT S. The stock trades about -0.21 of its potential returns per unit of risk. The AT S Austria is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,179 in AT S Austria on December 6, 2024 and sell it today you would earn a total of 43.00 from holding AT S Austria or generate 3.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNH Industrial NV vs. AT S Austria
Performance |
| Timeline |
| CNH Industrial NV |
| AT S Austria |
CNH Industrial and AT S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNH Industrial and AT S
The main advantage of trading using opposite CNH Industrial and AT S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNH Industrial position performs unexpectedly, AT S 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 AT S will offset losses from the drop in AT S's long position.| CNH Industrial vs. BKS Bank AG | CNH Industrial vs. Erste Group Bank | CNH Industrial vs. Vienna Insurance Group | CNH Industrial vs. Oberbank AG |
| AT S vs. Voestalpine AG | AT S vs. Lenzing Aktiengesellschaft | AT S vs. Andritz AG | AT S vs. OMV Aktiengesellschaft |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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