Correlation Between CNH Industrial and Nikola Corp
Can any of the company-specific risk be diversified away by investing in both CNH Industrial and Nikola Corp 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 Nikola Corp 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 Nikola Corp, you can compare the effects of market volatilities on CNH Industrial and Nikola Corp 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 Nikola Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNH Industrial and Nikola Corp.
Diversification Opportunities for CNH Industrial and Nikola Corp
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between CNH and Nikola is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding CNH Industrial NV and Nikola Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nikola Corp 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 Nikola Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nikola Corp has no effect on the direction of CNH Industrial i.e., CNH Industrial and Nikola Corp go up and down completely randomly.
Pair Corralation between CNH Industrial and Nikola Corp
If you would invest 1,145 in CNH Industrial NV on August 27, 2024 and sell it today you would earn a total of 0.00 from holding CNH Industrial NV or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
CNH Industrial NV vs. Nikola Corp
Performance |
| Timeline |
| CNH Industrial NV |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Nikola Corp |
CNH Industrial and Nikola Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNH Industrial and Nikola Corp
The main advantage of trading using opposite CNH Industrial and Nikola Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNH Industrial position performs unexpectedly, Nikola Corp 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 Nikola Corp will offset losses from the drop in Nikola Corp's long position.| CNH Industrial vs. Deere Company | CNH Industrial vs. Lindsay | CNH Industrial vs. Alamo Group | CNH Industrial vs. Caterpillar |
| Nikola Corp vs. Lion Electric Corp | Nikola Corp vs. Xos Inc | Nikola Corp vs. Hydrofarm Holdings Group | Nikola Corp vs. Caterpillar |
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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