Correlation Between Sany Heavy and CNH Industrial
Can any of the company-specific risk be diversified away by investing in both Sany Heavy 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 Sany Heavy and CNH Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sany Heavy Equipment and CNH Industrial NV, you can compare the effects of market volatilities on Sany Heavy 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 Sany Heavy with a short position of CNH Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sany Heavy and CNH Industrial.
Diversification Opportunities for Sany Heavy and CNH Industrial
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sany and CNH is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Sany Heavy Equipment 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 Sany Heavy 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 Sany Heavy Equipment 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 Sany Heavy i.e., Sany Heavy and CNH Industrial go up and down completely randomly.
Pair Corralation between Sany Heavy and CNH Industrial
Assuming the 90 days horizon Sany Heavy Equipment is expected to under-perform the CNH Industrial. In addition to that, Sany Heavy is 1.68 times more volatile than CNH Industrial NV. It trades about -0.01 of its total potential returns per unit of risk. CNH Industrial NV is currently generating about 0.01 per unit of volatility. If you would invest 1,218 in CNH Industrial NV on September 4, 2024 and sell it today you would lose (42.00) from holding CNH Industrial NV or give up 3.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sany Heavy Equipment vs. CNH Industrial NV
Performance |
| Timeline |
| Sany Heavy Equipment |
| CNH Industrial NV |
Sany Heavy and CNH Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sany Heavy and CNH Industrial
The main advantage of trading using opposite Sany Heavy and CNH Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sany Heavy 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.| Sany Heavy vs. Komatsu | Sany Heavy vs. CNH Industrial NV | Sany Heavy vs. KUBOTA P ADR20 | Sany Heavy vs. Hitachi Construction Machinery |
| CNH Industrial vs. Komatsu | CNH Industrial vs. KUBOTA P ADR20 | CNH Industrial vs. Hitachi Construction Machinery | CNH Industrial vs. Terex |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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