Correlation Between CNH Industrial and Vape Holdings

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

Diversification Opportunities for CNH Industrial and Vape Holdings

0.05

Correlation Coefficient

CNH Industrial  Vape Holdings

Significant diversification

The 3 months correlation between CNH and Vape is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding CNH Industrial NV and Vape Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vape Holdings 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 Vape Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vape Holdings has no effect on the direction of CNH Industrial i.e., CNH Industrial and Vape Holdings go up and down completely randomly.

Pair Corralation between CNH Industrial and Vape Holdings

Considering the 90-day investment horizon CNH Industrial is expected to generate 154.97 times less return on investment than Vape Holdings. But when comparing it to its historical volatility, CNH Industrial NV is 39.65 times less risky than Vape Holdings. It trades about 0.03 of its potential returns per unit of risk. Vape Holdings is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  671.00  in Vape Holdings on May 5, 2025 and sell it today you would earn a total of  1,459  from holding Vape Holdings or generate 217.44% return on investment over 90 days.

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

CNH Industrial NV  vs.  Vape Holdings

CNH Industrial NV

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CNH Industrial NV are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, CNH Industrial is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Vape Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vape Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Vape Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CNH Industrial and Vape Holdings

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

The idea behind CNH Industrial NV and Vape Holdings 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.