Correlation Between GreenX Metals and CNH Industrial
Can any of the company-specific risk be diversified away by investing in both GreenX Metals 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 GreenX Metals and CNH Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenX Metals and CNH Industrial NV, you can compare the effects of market volatilities on GreenX Metals 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 GreenX Metals with a short position of CNH Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenX Metals and CNH Industrial.
Diversification Opportunities for GreenX Metals and CNH Industrial
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GreenX and CNH is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding GreenX Metals 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 GreenX Metals 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 GreenX Metals 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 GreenX Metals i.e., GreenX Metals and CNH Industrial go up and down completely randomly.
Pair Corralation between GreenX Metals and CNH Industrial
Assuming the 90 days trading horizon GreenX Metals is expected to generate 0.43 times more return on investment than CNH Industrial. However, GreenX Metals is 2.35 times less risky than CNH Industrial. It trades about 0.08 of its potential returns per unit of risk. CNH Industrial NV is currently generating about 0.04 per unit of risk. If you would invest 3,550 in GreenX Metals on December 4, 2024 and sell it today you would earn a total of 300.00 from holding GreenX Metals or generate 8.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.39% |
Values | Daily Returns |
GreenX Metals vs. CNH Industrial NV
Performance |
Timeline |
GreenX Metals |
CNH Industrial NV |
GreenX Metals and CNH Industrial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GreenX Metals and CNH Industrial
The main advantage of trading using opposite GreenX Metals and CNH Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenX Metals 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.GreenX Metals vs. First Class Metals | GreenX Metals vs. Applied Materials | GreenX Metals vs. Nordic Semiconductor ASA | GreenX Metals vs. Wheaton Precious Metals |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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