Correlation Between CF Industries and Distoken Acquisition
Can any of the company-specific risk be diversified away by investing in both CF Industries and Distoken Acquisition 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 Distoken Acquisition 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 Distoken Acquisition, you can compare the effects of market volatilities on CF Industries and Distoken Acquisition 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 Distoken Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Industries and Distoken Acquisition.
Diversification Opportunities for CF Industries and Distoken Acquisition
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CF Industries and Distoken is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding CF Industries Holdings and Distoken Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Distoken Acquisition 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 Distoken Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Distoken Acquisition has no effect on the direction of CF Industries i.e., CF Industries and Distoken Acquisition go up and down completely randomly.
Pair Corralation between CF Industries and Distoken Acquisition
Allowing for the 90-day total investment horizon CF Industries is expected to generate 59.45 times less return on investment than Distoken Acquisition. But when comparing it to its historical volatility, CF Industries Holdings is 25.73 times less risky than Distoken Acquisition. It trades about 0.02 of its potential returns per unit of risk. Distoken Acquisition is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Distoken Acquisition on October 9, 2024 and sell it today you would earn a total of 1,120 from holding Distoken Acquisition or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.1% |
| Values | Daily Returns |
CF Industries Holdings vs. Distoken Acquisition
Performance |
| Timeline |
| CF Industries Holdings |
| Distoken Acquisition |
CF Industries and Distoken Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CF Industries and Distoken Acquisition
The main advantage of trading using opposite CF Industries and Distoken Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF Industries position performs unexpectedly, Distoken Acquisition 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 Distoken Acquisition will offset losses from the drop in Distoken Acquisition's long position.| CF Industries vs. Nutrien | CF Industries vs. Intrepid Potash | CF Industries vs. Corteva | CF Industries vs. ICL Israel Chemicals |
| Distoken Acquisition vs. Loews Corp | Distoken Acquisition vs. NI Holdings | Distoken Acquisition vs. RBC Bearings Incorporated | Distoken Acquisition vs. Videolocity International |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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