Correlation Between CF Industries and Atacado SA
Can any of the company-specific risk be diversified away by investing in both CF Industries and Atacado SA 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 Atacado SA 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 Atacado SA, you can compare the effects of market volatilities on CF Industries and Atacado SA 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 Atacado SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Industries and Atacado SA.
Diversification Opportunities for CF Industries and Atacado SA
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CF Industries and Atacado is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding CF Industries Holdings and Atacado SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atacado SA 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 Atacado SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atacado SA has no effect on the direction of CF Industries i.e., CF Industries and Atacado SA go up and down completely randomly.
Pair Corralation between CF Industries and Atacado SA
If you would invest 7,505 in CF Industries Holdings on September 14, 2024 and sell it today you would earn a total of 1,462 from holding CF Industries Holdings or generate 19.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.37% |
| Values | Daily Returns |
CF Industries Holdings vs. Atacado SA
Performance |
| Timeline |
| CF Industries Holdings |
| Atacado SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CF Industries and Atacado SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CF Industries and Atacado SA
The main advantage of trading using opposite CF Industries and Atacado SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF Industries position performs unexpectedly, Atacado SA 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 Atacado SA will offset losses from the drop in Atacado SA's long position.| CF Industries vs. Corteva | CF Industries vs. ICL Israel Chemicals | CF Industries vs. American Vanguard | CF Industries vs. CVR Partners LP |
| Atacado SA vs. CF Industries Holdings | Atacado SA vs. Flexible Solutions International | Atacado SA vs. Ecovyst | Atacado SA vs. Where Food Comes |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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