Cummins Stock Market Value
| CMI Stock | USD 292.70 2.30 0.79% |
| Symbol | Cummins |
Is Cummins' industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Cummins. If investors know Cummins will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Cummins listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
The market value of Cummins is measured differently than its book value, which is the value of Cummins that is recorded on the company's balance sheet. Investors also form their own opinion of Cummins' value that differs from its market value or its book value, called intrinsic value, which is Cummins' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Cummins' market value can be influenced by many factors that don't directly affect Cummins' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Cummins' value and its price as these two are different measures arrived at by different means. Investors typically determine if Cummins is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Cummins' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.
Cummins 'What if' Analysis
In the world of financial modeling, what-if analysis is part of sensitivity analysis performed to test how changes in assumptions impact individual outputs in a model. When applied to Cummins' stock what-if analysis refers to the analyzing how the change in your past investing horizon will affect the profitability against the current market value of Cummins.
| 03/26/2024 |
| 04/25/2024 |
If you would invest 0.00 in Cummins on March 26, 2024 and sell it all today you would earn a total of 0.00 from holding Cummins or generate 0.0% return on investment in Cummins over 30 days. Cummins is related to or competes with Illinois Tool, Dover, Eaton PLC, Parker Hannifin, Emerson Electric, Rockwell Automation, and Ingersoll Rand. Cummins Inc. designs, manufactures, distributes, and services diesel and natural gas engines, electric and hybrid powert... More
Cummins Upside/Downside Indicators
Understanding different market momentum indicators often help investors to time their next move. Potential upside and downside technical ratios enable traders to measure Cummins' stock current market value against overall market sentiment and can be a good tool during both bulling and bearish trends. Here we outline some of the essential indicators to assess Cummins upside and downside potential and time the market with a certain degree of confidence.
| Downside Deviation | 1.27 | |||
| Information Ratio | 0.1734 | |||
| Maximum Drawdown | 6.97 | |||
| Value At Risk | (1.74) | |||
| Potential Upside | 2.35 |
Cummins Market Risk Indicators
Today, many novice investors tend to focus exclusively on investment returns with little concern for Cummins' investment risk. Other traders do consider volatility but use just one or two very conventional indicators such as Cummins' standard deviation. In reality, there are many statistical measures that can use Cummins historical prices to predict the future Cummins' volatility.| Risk Adjusted Performance | 0.1531 | |||
| Jensen Alpha | 0.3323 | |||
| Total Risk Alpha | 0.1455 | |||
| Sortino Ratio | 0.1905 | |||
| Treynor Ratio | (1.88) |
Sophisticated investors, who have witnessed many market ups and downs, anticipate that the market will even out over time. This tendency of Cummins' price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
Cummins Backtested Returns
Cummins appears to be very steady, given 3 months investment horizon. Cummins secures Sharpe Ratio (or Efficiency) of 0.24, which signifies that the company had a 0.24% return per unit of risk over the last 3 months. We have found thirty technical indicators for Cummins, which you can use to evaluate the volatility of the firm. Please makes use of Cummins' Downside Deviation of 1.27, risk adjusted performance of 0.1531, and Mean Deviation of 0.9959 to double-check if our risk estimates are consistent with your expectations. On a scale of 0 to 100, Cummins holds a performance score of 18. The firm shows a Beta (market volatility) of -0.17, which signifies not very significant fluctuations relative to the market. As returns on the market increase, returns on owning Cummins are expected to decrease at a much lower rate. During the bear market, Cummins is likely to outperform the market. Please check Cummins' total risk alpha, expected short fall, market facilitation index, as well as the relationship between the value at risk and daily balance of power , to make a quick decision on whether Cummins' price patterns will revert.
Auto-correlation | -0.48 |
Modest reverse predictability
Cummins has modest reverse predictability. Overlapping area represents the amount of predictability between Cummins time series from 26th of March 2024 to 10th of April 2024 and 10th of April 2024 to 25th of April 2024. The more autocorrelation exist between current time interval and its lagged values, the more accurately you can make projection about the future pattern of Cummins price movement. The serial correlation of -0.48 indicates that about 48.0% of current Cummins price fluctuation can be explain by its past prices.
| Correlation Coefficient | -0.48 | |
| Spearman Rank Test | -0.73 | |
| Residual Average | 0.0 | |
| Price Variance | 21.83 |
Cummins lagged returns against current returns
Autocorrelation, which is Cummins stock's lagged correlation, explains the relationship between observations of its time series of returns over different periods of time. The observations are said to be independent if autocorrelation is zero. Autocorrelation is calculated as a function of mean and variance and can have practical application in predicting Cummins' stock expected returns. We can calculate the autocorrelation of Cummins returns to help us make a trade decision. For example, suppose you find that Cummins has exhibited high autocorrelation historically, and you observe that the stock is moving up for the past few days. In that case, you can expect the price movement to match the lagging time series.
Current and Lagged Values |
| Timeline |
Cummins regressed lagged prices vs. current prices
Serial correlation can be approximated by using the Durbin-Watson (DW) test. The correlation can be either positive or negative. If Cummins stock is displaying a positive serial correlation, investors will expect a positive pattern to continue. However, if Cummins stock is observed to have a negative serial correlation, investors will generally project negative sentiment on having a locked-in long position in Cummins stock over time.
Current vs Lagged Prices |
| Timeline |
Cummins Lagged Returns
When evaluating Cummins' market value, investors can use the concept of autocorrelation to see how much of an impact past prices of Cummins stock have on its future price. Cummins autocorrelation represents the degree of similarity between a given time horizon and a lagged version of the same horizon over the previous time interval. In other words, Cummins autocorrelation shows the relationship between Cummins stock current value and its past values and can show if there is a momentum factor associated with investing in Cummins.
Regressed Prices |
| Timeline |
Some investors attempt to determine whether the market's mood is bullish or bearish by monitoring changes in market sentiment. Unlike more traditional methods such as technical analysis, investor sentiment usually refers to the aggregate attitude towards Cummins in the overall investment community. So, suppose investors can accurately measure the market's sentiment. In that case, they can use it for their benefit. For example, some tools to gauge market sentiment could be utilized using contrarian indexes, Cummins' short interest history, or implied volatility extrapolated from Cummins options trading.
Pair Trading with Cummins
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Cummins position performs unexpectedly, the other equity 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 Cummins will appreciate offsetting losses from the drop in the long position's value.Moving together with Cummins Stock
| 0.67 | CR | Crane Company Financial Report 8th of May 2024 | PairCorr |
| 0.68 | IR | Ingersoll Rand Financial Report 1st of May 2024 | PairCorr |
Moving against Cummins Stock
| 0.87 | ATS | ATS Corporation | PairCorr |
| 0.48 | BW | Babcock Wilcox Enter Buyout Trend | PairCorr |
The ability to find closely correlated positions to Cummins could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Cummins when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Cummins - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Cummins to buy it.
The correlation of Cummins is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Cummins moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Cummins moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Cummins can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Check out Cummins Correlation, Cummins Volatility and Cummins Alpha and Beta module to complement your research on Cummins. For more detail on how to invest in Cummins Stock please use our How to Invest in Cummins guide.You can also try the Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Complementary Tools for Cummins Stock analysis
When running Cummins' price analysis, check to measure Cummins' market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Cummins is operating at the current time. Most of Cummins' value examination focuses on studying past and present price action to predict the probability of Cummins' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Cummins' price. Additionally, you may evaluate how the addition of Cummins to your portfolios can decrease your overall portfolio volatility.
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Cummins technical stock analysis exercises models and trading practices based on price and volume transformations, such as the moving averages, relative strength index, regressions, price and return correlations, business cycles, stock market cycles, or different charting patterns.