Correlation Between Montana Technologies and CF Industries
Can any of the company-specific risk be diversified away by investing in both Montana Technologies 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 Montana Technologies and CF Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Montana Technologies and CF Industries Holdings, you can compare the effects of market volatilities on Montana Technologies 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 Montana Technologies with a short position of CF Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Montana Technologies and CF Industries.
Diversification Opportunities for Montana Technologies and CF Industries
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Montana and CF Industries is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Montana Technologies 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 Montana Technologies 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 Montana Technologies 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 Montana Technologies i.e., Montana Technologies and CF Industries go up and down completely randomly.
Pair Corralation between Montana Technologies and CF Industries
Given the investment horizon of 90 days Montana Technologies is expected to under-perform the CF Industries. In addition to that, Montana Technologies is 4.22 times more volatile than CF Industries Holdings. It trades about -0.04 of its total potential returns per unit of risk. CF Industries Holdings is currently generating about 0.05 per unit of volatility. If you would invest 7,505 in CF Industries Holdings on September 15, 2024 and sell it today you would earn a total of 1,445 from holding CF Industries Holdings or generate 19.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 72.12% |
| Values | Daily Returns |
Montana Technologies vs. CF Industries Holdings
Performance |
| Timeline |
| Montana Technologies |
| CF Industries Holdings |
Montana Technologies and CF Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Montana Technologies and CF Industries
The main advantage of trading using opposite Montana Technologies and CF Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Montana Technologies 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.| Montana Technologies vs. United States Steel | Montana Technologies vs. Cementos Pacasmayo SAA | Montana Technologies vs. Osaka Steel Co, | Montana Technologies vs. Highway Holdings Limited |
| CF Industries vs. Corteva | CF Industries vs. ICL Israel Chemicals | CF Industries vs. American Vanguard | CF Industries vs. CVR Partners LP |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |