Correlation Between CNH Industrial and ASURE SOFTWARE
Can any of the company-specific risk be diversified away by investing in both CNH Industrial and ASURE SOFTWARE 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 ASURE SOFTWARE 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 ASURE SOFTWARE, you can compare the effects of market volatilities on CNH Industrial and ASURE SOFTWARE 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 ASURE SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNH Industrial and ASURE SOFTWARE.
Diversification Opportunities for CNH Industrial and ASURE SOFTWARE
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CNH and ASURE is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding CNH Industrial NV and ASURE SOFTWARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASURE SOFTWARE 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 ASURE SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASURE SOFTWARE has no effect on the direction of CNH Industrial i.e., CNH Industrial and ASURE SOFTWARE go up and down completely randomly.
Pair Corralation between CNH Industrial and ASURE SOFTWARE
Assuming the 90 days horizon CNH Industrial NV is expected to generate 1.02 times more return on investment than ASURE SOFTWARE. However, CNH Industrial is 1.02 times more volatile than ASURE SOFTWARE. It trades about 0.0 of its potential returns per unit of risk. ASURE SOFTWARE is currently generating about -0.31 per unit of risk. If you would invest 1,219 in CNH Industrial NV on December 4, 2024 and sell it today you would lose (6.00) from holding CNH Industrial NV or give up 0.49% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
CNH Industrial NV vs. ASURE SOFTWARE
Performance |
Timeline |
CNH Industrial NV |
ASURE SOFTWARE |
CNH Industrial and ASURE SOFTWARE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CNH Industrial and ASURE SOFTWARE
The main advantage of trading using opposite CNH Industrial and ASURE SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNH Industrial position performs unexpectedly, ASURE SOFTWARE 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 ASURE SOFTWARE will offset losses from the drop in ASURE SOFTWARE's long position.CNH Industrial vs. Indutrade AB | CNH Industrial vs. Sportsmans Warehouse Holdings | CNH Industrial vs. AUTO TRADER ADR | CNH Industrial vs. TRADEGATE |
ASURE SOFTWARE vs. Universal Health Services | ASURE SOFTWARE vs. Xiwang Special Steel | ASURE SOFTWARE vs. CLOVER HEALTH INV | ASURE SOFTWARE vs. Siemens Healthineers AG |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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