Correlation Between CF Industries and 06051GGA1
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By analyzing existing cross correlation between CF Industries Holdings and BANK AMER P, you can compare the effects of market volatilities on CF Industries and 06051GGA1 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 06051GGA1. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Industries and 06051GGA1.
Diversification Opportunities for CF Industries and 06051GGA1
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between CF Industries and 06051GGA1 is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding CF Industries Holdings and BANK AMER P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK AMER P 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 06051GGA1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK AMER P has no effect on the direction of CF Industries i.e., CF Industries and 06051GGA1 go up and down completely randomly.
Pair Corralation between CF Industries and 06051GGA1
Allowing for the 90-day total investment horizon CF Industries Holdings is expected to under-perform the 06051GGA1. In addition to that, CF Industries is 8.02 times more volatile than BANK AMER P. It trades about -0.05 of its total potential returns per unit of risk. BANK AMER P is currently generating about 0.05 per unit of volatility. If you would invest 9,626 in BANK AMER P on December 26, 2024 and sell it today you would earn a total of 93.00 from holding BANK AMER P or generate 0.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.39% |
Values | Daily Returns |
CF Industries Holdings vs. BANK AMER P
Performance |
Timeline |
CF Industries Holdings |
BANK AMER P |
CF Industries and 06051GGA1 Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CF Industries and 06051GGA1
The main advantage of trading using opposite CF Industries and 06051GGA1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF Industries position performs unexpectedly, 06051GGA1 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 06051GGA1 will offset losses from the drop in 06051GGA1's long position.CF Industries vs. Nutrien | CF Industries vs. Intrepid Potash | CF Industries vs. Corteva | CF Industries vs. ICL Israel Chemicals |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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