Correlation Between CF Industries and Evolution Gaming
Can any of the company-specific risk be diversified away by investing in both CF Industries and Evolution Gaming 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 Evolution Gaming 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 Evolution Gaming Group, you can compare the effects of market volatilities on CF Industries and Evolution Gaming 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 Evolution Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Industries and Evolution Gaming.
Diversification Opportunities for CF Industries and Evolution Gaming
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CF Industries and Evolution is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding CF Industries Holdings and Evolution Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Gaming 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 Evolution Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Gaming has no effect on the direction of CF Industries i.e., CF Industries and Evolution Gaming go up and down completely randomly.
Pair Corralation between CF Industries and Evolution Gaming
Allowing for the 90-day total investment horizon CF Industries Holdings is expected to generate 1.27 times more return on investment than Evolution Gaming. However, CF Industries is 1.27 times more volatile than Evolution Gaming Group. It trades about 0.21 of its potential returns per unit of risk. Evolution Gaming Group is currently generating about -0.33 per unit of risk. If you would invest 8,143 in CF Industries Holdings on August 27, 2024 and sell it today you would earn a total of 596.00 from holding CF Industries Holdings or generate 7.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CF Industries Holdings vs. Evolution Gaming Group
Performance |
| Timeline |
| CF Industries Holdings |
| Evolution Gaming |
CF Industries and Evolution Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CF Industries and Evolution Gaming
The main advantage of trading using opposite CF Industries and Evolution Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF Industries position performs unexpectedly, Evolution Gaming 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 Evolution Gaming will offset losses from the drop in Evolution Gaming's long position.| CF Industries vs. Nutrien | CF Industries vs. Intrepid Potash | CF Industries vs. Corteva | CF Industries vs. ICL Israel Chemicals |
| Evolution Gaming vs. Real Luck Group | Evolution Gaming vs. Betmakers Technology Group | Evolution Gaming vs. Jackpot Digital |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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