Correlation Between CF Industries and Coursera

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

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

Diversification Opportunities for CF Industries and Coursera

0.3

Correlation Coefficient

CF Industries  Coursera

Weak diversification

The 3 months correlation between CF Industries and Coursera is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding CF Industries Holdings and Coursera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coursera and CF Industries 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 CF Industries Holdings are associated (or correlated) with Coursera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coursera has no effect on the direction of CF Industries i.e., CF Industries and Coursera go up and down completely randomly.

Pair Corralation between CF Industries and Coursera

Allowing for the 90-day total investment horizon CF Industries Holdings is expected to under-perform the Coursera. But the stock apears to be less risky and, when comparing its historical volatility, CF Industries Holdings is 2.05 times less risky than Coursera. The stock trades about -0.15 of its potential returns per unit of risk. The Coursera is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  711.00  in Coursera on September 23, 2024 and sell it today you would earn a total of  120.00  from holding Coursera or generate 16.88% return on investment over 90 days.

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

CF Industries Holdings  vs.  Coursera

CF Industries Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CF Industries Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, CF Industries is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Coursera

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Coursera are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Coursera may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with CF Industries and Coursera

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

The idea behind CF Industries Holdings and Coursera 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.