Correlation Between CF Industries and Cresud SACIF
Can any of the company-specific risk be diversified away by investing in both CF Industries and Cresud SACIF 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 Cresud SACIF 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 Cresud SACIF y, you can compare the effects of market volatilities on CF Industries and Cresud SACIF 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 Cresud SACIF. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Industries and Cresud SACIF.
Diversification Opportunities for CF Industries and Cresud SACIF
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CF Industries and Cresud is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding CF Industries Holdings and Cresud SACIF y in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cresud SACIF y 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 Cresud SACIF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cresud SACIF y has no effect on the direction of CF Industries i.e., CF Industries and Cresud SACIF go up and down completely randomly.
Pair Corralation between CF Industries and Cresud SACIF
Allowing for the 90-day total investment horizon CF Industries is expected to generate 5.51 times less return on investment than Cresud SACIF. But when comparing it to its historical volatility, CF Industries Holdings is 1.51 times less risky than Cresud SACIF. It trades about 0.02 of its potential returns per unit of risk. Cresud SACIF y is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 553.00 in Cresud SACIF y on November 2, 2024 and sell it today you would earn a total of 766.00 from holding Cresud SACIF y or generate 138.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CF Industries Holdings vs. Cresud SACIF y
Performance |
| Timeline |
| CF Industries Holdings |
| Cresud SACIF y |
CF Industries and Cresud SACIF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CF Industries and Cresud SACIF
The main advantage of trading using opposite CF Industries and Cresud SACIF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF Industries position performs unexpectedly, Cresud SACIF 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 Cresud SACIF will offset losses from the drop in Cresud SACIF's long position.| CF Industries vs. Nutrien | CF Industries vs. Intrepid Potash | CF Industries vs. Corteva | CF Industries vs. ICL Israel Chemicals |
| Cresud SACIF vs. Griffon | Cresud SACIF vs. Matthews International | Cresud SACIF vs. Valmont Industries | Cresud SACIF vs. Steel Partners Holdings |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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