Correlation Between CNH Industrial and Vienna Insurance
Can any of the company-specific risk be diversified away by investing in both CNH Industrial and Vienna Insurance 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 Vienna Insurance 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 Vienna Insurance Group, you can compare the effects of market volatilities on CNH Industrial and Vienna Insurance 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 Vienna Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNH Industrial and Vienna Insurance.
Diversification Opportunities for CNH Industrial and Vienna Insurance
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CNH and Vienna is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding CNH Industrial NV and Vienna Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vienna Insurance 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 Vienna Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vienna Insurance has no effect on the direction of CNH Industrial i.e., CNH Industrial and Vienna Insurance go up and down completely randomly.
Pair Corralation between CNH Industrial and Vienna Insurance
Assuming the 90 days trading horizon CNH Industrial NV is expected to generate 2.01 times more return on investment than Vienna Insurance. However, CNH Industrial is 2.01 times more volatile than Vienna Insurance Group. It trades about 0.09 of its potential returns per unit of risk. Vienna Insurance Group is currently generating about -0.01 per unit of risk. If you would invest 962.00 in CNH Industrial NV on September 1, 2024 and sell it today you would earn a total of 236.00 from holding CNH Industrial NV or generate 24.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNH Industrial NV vs. Vienna Insurance Group
Performance |
| Timeline |
| CNH Industrial NV |
| Vienna Insurance |
CNH Industrial and Vienna Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNH Industrial and Vienna Insurance
The main advantage of trading using opposite CNH Industrial and Vienna Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNH Industrial position performs unexpectedly, Vienna Insurance 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 Vienna Insurance will offset losses from the drop in Vienna Insurance's long position.| CNH Industrial vs. RATH Aktiengesellschaft | CNH Industrial vs. Oesterr Post AG | CNH Industrial vs. Voestalpine AG | CNH Industrial vs. iShares ATX UCITS |
| Vienna Insurance vs. Oesterr Post AG | Vienna Insurance vs. Raiffeisen Bank International | Vienna Insurance vs. Voestalpine AG | Vienna Insurance 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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