Correlation Between Empire Metals and CNH Industrial
Can any of the company-specific risk be diversified away by investing in both Empire Metals and CNH Industrial 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 Empire Metals and CNH Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire Metals Limited and CNH Industrial NV, you can compare the effects of market volatilities on Empire Metals and CNH Industrial 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 Empire Metals with a short position of CNH Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire Metals and CNH Industrial.
Diversification Opportunities for Empire Metals and CNH Industrial
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Empire and CNH is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Empire Metals Limited and CNH Industrial NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNH Industrial NV and Empire Metals 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 Empire Metals Limited are associated (or correlated) with CNH Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNH Industrial NV has no effect on the direction of Empire Metals i.e., Empire Metals and CNH Industrial go up and down completely randomly.
Pair Corralation between Empire Metals and CNH Industrial
Assuming the 90 days trading horizon Empire Metals is expected to generate 321.33 times less return on investment than CNH Industrial. In addition to that, Empire Metals is 1.11 times more volatile than CNH Industrial NV. It trades about 0.0 of its total potential returns per unit of risk. CNH Industrial NV is currently generating about 0.02 per unit of volatility. If you would invest 1,030 in CNH Industrial NV on October 16, 2024 and sell it today you would earn a total of 57.00 from holding CNH Industrial NV or generate 5.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 88.06% |
| Values | Daily Returns |
Empire Metals Limited vs. CNH Industrial NV
Performance |
| Timeline |
| Empire Metals Limited |
| CNH Industrial NV |
Empire Metals and CNH Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire Metals and CNH Industrial
The main advantage of trading using opposite Empire Metals and CNH Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire Metals position performs unexpectedly, CNH Industrial 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 CNH Industrial will offset losses from the drop in CNH Industrial's long position.| Empire Metals vs. Delta Air Lines | Empire Metals vs. Systemair AB | Empire Metals vs. Wizz Air Holdings | Empire Metals vs. Jupiter Fund Management |
| CNH Industrial vs. Playtech Plc | CNH Industrial vs. Jupiter Green Investment | CNH Industrial vs. Concurrent Technologies Plc | CNH Industrial vs. Allianz Technology Trust |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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