Correlation Between CNH Industrial and Carlisle Companies

Can any of the company-specific risk be diversified away by investing in both CNH Industrial and Carlisle Companies 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 Carlisle Companies 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 Carlisle Companies Incorporated, you can compare the effects of market volatilities on CNH Industrial and Carlisle Companies 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 Carlisle Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNH Industrial and Carlisle Companies.

Diversification Opportunities for CNH Industrial and Carlisle Companies

0.69

Correlation Coefficient

CNH Industrial  Carlisle Companies

Poor diversification

The 3 months correlation between CNH and Carlisle is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding CNH Industrial NV and Carlisle Companies Incorporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlisle Companies 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 Carlisle Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlisle Companies has no effect on the direction of CNH Industrial i.e., CNH Industrial and Carlisle Companies go up and down completely randomly.

Pair Corralation between CNH Industrial and Carlisle Companies

Considering the 90-day investment horizon CNH Industrial NV is expected to under-perform the Carlisle Companies. In addition to that, CNH Industrial is 1.1 times more volatile than Carlisle Companies Incorporated. It trades about -0.08 of its total potential returns per unit of risk. Carlisle Companies Incorporated is currently generating about -0.07 per unit of volatility. If you would invest  36,439  in Carlisle Companies Incorporated on September 12, 2025 and sell it today you would lose (3,152) from holding Carlisle Companies Incorporated or give up 8.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

CNH Industrial NV  vs.  Carlisle Companies Incorporate

CNH Industrial NV

Risk-Adjusted Performance

Weakest

Over the last 90 days CNH Industrial NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Carlisle Companies

Risk-Adjusted Performance

Weakest

Over the last 90 days Carlisle Companies Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with CNH Industrial and Carlisle Companies

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

The idea behind CNH Industrial NV and Carlisle Companies Incorporated 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.