Correlation Between Anterix and CF Industries

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

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

Diversification Opportunities for Anterix and CF Industries

-0.44

Correlation Coefficient

Anterix  CF Industries

Very good diversification

The 3 months correlation between Anterix and CF Industries is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Anterix and CF Industries Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CF Industries Holdings and Anterix 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 Anterix are associated (or correlated) with CF Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CF Industries Holdings has no effect on the direction of Anterix i.e., Anterix and CF Industries go up and down completely randomly.

Pair Corralation between Anterix and CF Industries

Given the investment horizon of 90 days Anterix is expected to generate 1.32 times less return on investment than CF Industries. In addition to that, Anterix is 1.45 times more volatile than CF Industries Holdings. It trades about 0.14 of its total potential returns per unit of risk. CF Industries Holdings is currently generating about 0.27 per unit of volatility. If you would invest  8,175  in CF Industries Holdings on September 1, 2024 and sell it today you would earn a total of  791.00  from holding CF Industries Holdings or generate 9.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Anterix  vs.  CF Industries Holdings

Anterix

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anterix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Anterix is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

CF Industries Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CF Industries Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, CF Industries reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Anterix and CF Industries

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

The idea behind Anterix and CF Industries 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.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.