Correlation Between CF Industries and Cheche Group
Can any of the company-specific risk be diversified away by investing in both CF Industries and Cheche Group 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 Cheche Group 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 Cheche Group Class, you can compare the effects of market volatilities on CF Industries and Cheche Group 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 Cheche Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Industries and Cheche Group.
Diversification Opportunities for CF Industries and Cheche Group
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CF Industries and Cheche is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding CF Industries Holdings and Cheche Group Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheche Group Class 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 Cheche Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheche Group Class has no effect on the direction of CF Industries i.e., CF Industries and Cheche Group go up and down completely randomly.
Pair Corralation between CF Industries and Cheche Group
Allowing for the 90-day total investment horizon CF Industries Holdings is expected to generate 0.23 times more return on investment than Cheche Group. However, CF Industries Holdings is 4.27 times less risky than Cheche Group. It trades about -0.02 of its potential returns per unit of risk. Cheche Group Class is currently generating about -0.12 per unit of risk. If you would invest 7,751 in CF Industries Holdings on December 25, 2024 and sell it today you would lose (68.00) from holding CF Industries Holdings or give up 0.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CF Industries Holdings vs. Cheche Group Class
Performance |
| Timeline |
| CF Industries Holdings |
| Cheche Group Class |
CF Industries and Cheche Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CF Industries and Cheche Group
The main advantage of trading using opposite CF Industries and Cheche Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF Industries position performs unexpectedly, Cheche Group 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 Cheche Group will offset losses from the drop in Cheche Group's long position.| CF Industries vs. Nutrien | CF Industries vs. Intrepid Potash | CF Industries vs. Corteva | CF Industries vs. ICL Israel Chemicals |
| Cheche Group vs. Primo Brands | Cheche Group vs. Fernhill Beverage | Cheche Group vs. Keurig Dr Pepper | Cheche Group vs. Constellation Brands Class |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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