Correlation Between Beyond Meat and CF Industries
Can any of the company-specific risk be diversified away by investing in both Beyond Meat 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 Beyond Meat and CF Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beyond Meat and CF Industries Holdings, you can compare the effects of market volatilities on Beyond Meat 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 Beyond Meat with a short position of CF Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beyond Meat and CF Industries.
Diversification Opportunities for Beyond Meat and CF Industries
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Beyond and CF Industries is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Meat 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 Beyond Meat 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 Beyond Meat 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 Beyond Meat i.e., Beyond Meat and CF Industries go up and down completely randomly.
Pair Corralation between Beyond Meat and CF Industries
Given the investment horizon of 90 days Beyond Meat is expected to under-perform the CF Industries. In addition to that, Beyond Meat is 2.62 times more volatile than CF Industries Holdings. It trades about -0.2 of its total potential returns per unit of risk. CF Industries Holdings is currently generating about 0.21 per unit of volatility. If you would invest 8,368 in CF Industries Holdings on August 24, 2024 and sell it today you would earn a total of 628.00 from holding CF Industries Holdings or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Beyond Meat vs. CF Industries Holdings
Performance |
| Timeline |
| Beyond Meat |
| CF Industries Holdings |
Beyond Meat and CF Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beyond Meat and CF Industries
The main advantage of trading using opposite Beyond Meat and CF Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beyond Meat 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.| Beyond Meat vs. Kraft Heinz Co | Beyond Meat vs. Hormel Foods | Beyond Meat vs. Kellanova | Beyond Meat vs. General Mills |
| 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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