Correlation Between A SPAC and CF Industries
Can any of the company-specific risk be diversified away by investing in both A SPAC 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 A SPAC and CF Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between A SPAC II and CF Industries Holdings, you can compare the effects of market volatilities on A SPAC 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 A SPAC with a short position of CF Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of A SPAC and CF Industries.
Diversification Opportunities for A SPAC and CF Industries
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between ASUUF and CF Industries is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding A SPAC II 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 A SPAC 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 A SPAC II 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 A SPAC i.e., A SPAC and CF Industries go up and down completely randomly.
Pair Corralation between A SPAC and CF Industries
Assuming the 90 days horizon A SPAC is expected to generate 15.64 times less return on investment than CF Industries. But when comparing it to its historical volatility, A SPAC II is 104.78 times less risky than CF Industries. It trades about 0.16 of its potential returns per unit of risk. CF Industries Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 8,877 in CF Industries Holdings on September 3, 2024 and sell it today you would earn a total of 89.00 from holding CF Industries Holdings or generate 1.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
A SPAC II vs. CF Industries Holdings
Performance |
| Timeline |
| A SPAC II |
| CF Industries Holdings |
A SPAC and CF Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with A SPAC and CF Industries
The main advantage of trading using opposite A SPAC and CF Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A SPAC 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.| A SPAC vs. CF Industries Holdings | A SPAC vs. Eastman Chemical | A SPAC vs. Codexis | A SPAC vs. Axalta Coating Systems |
| CF Industries vs. Nutrien | CF Industries vs. Intrepid Potash | CF Industries vs. Corteva | CF Industries vs. ICL Israel Chemicals |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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