Correlation Between ACCSYS TECHPLC and CNH Industrial

Can any of the company-specific risk be diversified away by investing in both ACCSYS TECHPLC 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 ACCSYS TECHPLC and CNH Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ACCSYS TECHPLC EO and CNH Industrial NV, you can compare the effects of market volatilities on ACCSYS TECHPLC 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 ACCSYS TECHPLC with a short position of CNH Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACCSYS TECHPLC and CNH Industrial.

Diversification Opportunities for ACCSYS TECHPLC and CNH Industrial

-0.5

Correlation Coefficient

ACCSYS TECHPLC  CNH Industrial

Very good diversification

The 3 months correlation between ACCSYS and CNH is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding ACCSYS TECHPLC EO 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 ACCSYS TECHPLC 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 ACCSYS TECHPLC EO 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 ACCSYS TECHPLC i.e., ACCSYS TECHPLC and CNH Industrial go up and down completely randomly.

Pair Corralation between ACCSYS TECHPLC and CNH Industrial

Assuming the 90 days horizon ACCSYS TECHPLC EO is expected to under-perform the CNH Industrial. In addition to that, ACCSYS TECHPLC is 1.13 times more volatile than CNH Industrial NV. It trades about -0.02 of its total potential returns per unit of risk. CNH Industrial NV is currently generating about 0.08 per unit of volatility. If you would invest  1,077  in CNH Industrial NV on December 19, 2024 and sell it today you would earn a total of  126.00  from holding CNH Industrial NV or generate 11.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

ACCSYS TECHPLC EO  vs.  CNH Industrial NV

ACCSYS TECHPLC EO

Risk-Adjusted Performance

Very Weak

Over the last 90 days ACCSYS TECHPLC EO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ACCSYS TECHPLC is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

CNH Industrial NV

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CNH Industrial NV are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, CNH Industrial reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ACCSYS TECHPLC and CNH Industrial

The main advantage of trading using opposite ACCSYS TECHPLC and CNH Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACCSYS TECHPLC 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.

The idea behind ACCSYS TECHPLC EO and CNH Industrial NV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.