Correlation Between Oberbank and CNH Industrial
Can any of the company-specific risk be diversified away by investing in both Oberbank 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 Oberbank and CNH Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oberbank AG and CNH Industrial NV, you can compare the effects of market volatilities on Oberbank 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 Oberbank with a short position of CNH Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oberbank and CNH Industrial.
Diversification Opportunities for Oberbank and CNH Industrial
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oberbank and CNH is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Oberbank AG 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 Oberbank 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 Oberbank AG 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 Oberbank i.e., Oberbank and CNH Industrial go up and down completely randomly.
Pair Corralation between Oberbank and CNH Industrial
Assuming the 90 days trading horizon Oberbank is expected to generate 13.36 times less return on investment than CNH Industrial. But when comparing it to its historical volatility, Oberbank AG is 22.84 times less risky than CNH Industrial. It trades about 0.29 of its potential returns per unit of risk. CNH Industrial NV is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,024 in CNH Industrial NV on August 24, 2024 and sell it today you would earn a total of 118.00 from holding CNH Industrial NV or generate 11.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Oberbank AG vs. CNH Industrial NV
Performance |
| Timeline |
| Oberbank AG |
| CNH Industrial NV |
Oberbank and CNH Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oberbank and CNH Industrial
The main advantage of trading using opposite Oberbank and CNH Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oberbank 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.| Oberbank vs. Addiko Bank AG | Oberbank vs. Universal Music Group | Oberbank vs. AMAG Austria Metall | Oberbank vs. Vienna Insurance Group |
| CNH Industrial vs. RATH Aktiengesellschaft | CNH Industrial vs. AT S Austria | CNH Industrial vs. BAWAG Group AG | CNH Industrial vs. Semperit Aktiengesellschaft Holding |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |