Correlation Between CF Industries and Grupo Aeroportuario
Can any of the company-specific risk be diversified away by investing in both CF Industries and Grupo Aeroportuario 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 Grupo Aeroportuario 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 Grupo Aeroportuario del, you can compare the effects of market volatilities on CF Industries and Grupo Aeroportuario 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 Grupo Aeroportuario. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Industries and Grupo Aeroportuario.
Diversification Opportunities for CF Industries and Grupo Aeroportuario
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between CF Industries and Grupo is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding CF Industries Holdings and Grupo Aeroportuario del in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Aeroportuario del 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 Grupo Aeroportuario. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Aeroportuario del has no effect on the direction of CF Industries i.e., CF Industries and Grupo Aeroportuario go up and down completely randomly.
Pair Corralation between CF Industries and Grupo Aeroportuario
Allowing for the 90-day total investment horizon CF Industries is expected to generate 1.27 times less return on investment than Grupo Aeroportuario. But when comparing it to its historical volatility, CF Industries Holdings is 1.45 times less risky than Grupo Aeroportuario. It trades about 0.04 of its potential returns per unit of risk. Grupo Aeroportuario del is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 21,954 in Grupo Aeroportuario del on September 1, 2024 and sell it today you would earn a total of 4,060 from holding Grupo Aeroportuario del or generate 18.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CF Industries Holdings vs. Grupo Aeroportuario del
Performance |
| Timeline |
| CF Industries Holdings |
| Grupo Aeroportuario del |
CF Industries and Grupo Aeroportuario Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CF Industries and Grupo Aeroportuario
The main advantage of trading using opposite CF Industries and Grupo Aeroportuario positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF Industries position performs unexpectedly, Grupo Aeroportuario 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 Grupo Aeroportuario will offset losses from the drop in Grupo Aeroportuario's long position.| CF Industries vs. Nutrien | CF Industries vs. Intrepid Potash | CF Industries vs. Corteva | CF Industries vs. ICL Israel Chemicals |
| Grupo Aeroportuario vs. Grupo Aeroportuario del | Grupo Aeroportuario vs. Corporacion America Airports | Grupo Aeroportuario vs. AerSale Corp | Grupo Aeroportuario vs. Flughafen Zrich AG |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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