Correlation Between CNHI Old and Astec Industries

Can any of the company-specific risk be diversified away by investing in both CNHI Old and Astec Industries 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 CNHI Old and Astec Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CNHI Old and Astec Industries, you can compare the effects of market volatilities on CNHI Old and Astec Industries 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 CNHI Old with a short position of Astec Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNHI Old and Astec Industries.

Diversification Opportunities for CNHI Old and Astec Industries

0.0

Correlation Coefficient

CNHI Old  Astec Industries

Pay attention - limited upside

The 3 months correlation between CNHI and Astec is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CNHI Old and Astec Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astec Industries and CNHI Old 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 CNHI Old are associated (or correlated) with Astec Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astec Industries has no effect on the direction of CNHI Old i.e., CNHI Old and Astec Industries go up and down completely randomly.

Pair Corralation between CNHI Old and Astec Industries

If you would invest (100.00) in CNHI Old on November 28, 2024 and sell it today you would earn a total of  100.00  from holding CNHI Old or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

CNHI Old  vs.  Astec Industries

CNHI Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days CNHI Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, CNHI Old is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Astec Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Astec Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with CNHI Old and Astec Industries

The main advantage of trading using opposite CNHI Old and Astec Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNHI Old position performs unexpectedly, Astec Industries 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 Astec Industries will offset losses from the drop in Astec Industries' long position.

The idea behind CNHI Old and Astec Industries 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.