Correlation Between CF Industries and Gatos Silver
Can any of the company-specific risk be diversified away by investing in both CF Industries and Gatos Silver 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 Gatos Silver 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 Gatos Silver, you can compare the effects of market volatilities on CF Industries and Gatos Silver 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 Gatos Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Industries and Gatos Silver.
Diversification Opportunities for CF Industries and Gatos Silver
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CF Industries and Gatos is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding CF Industries Holdings and Gatos Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gatos Silver 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 Gatos Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gatos Silver has no effect on the direction of CF Industries i.e., CF Industries and Gatos Silver go up and down completely randomly.
Pair Corralation between CF Industries and Gatos Silver
Allowing for the 90-day total investment horizon CF Industries Holdings is expected to generate 0.58 times more return on investment than Gatos Silver. However, CF Industries Holdings is 1.71 times less risky than Gatos Silver. It trades about 0.14 of its potential returns per unit of risk. Gatos Silver is currently generating about -0.1 per unit of risk. If you would invest 8,754 in CF Industries Holdings on October 20, 2024 and sell it today you would earn a total of 947.00 from holding CF Industries Holdings or generate 10.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.12% |
| Values | Daily Returns |
CF Industries Holdings vs. Gatos Silver
Performance |
| Timeline |
| CF Industries Holdings |
| Gatos Silver |
CF Industries and Gatos Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CF Industries and Gatos Silver
The main advantage of trading using opposite CF Industries and Gatos Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF Industries position performs unexpectedly, Gatos Silver 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 Gatos Silver will offset losses from the drop in Gatos Silver's long position.| CF Industries vs. Nutrien | CF Industries vs. Intrepid Potash | CF Industries vs. Corteva | CF Industries vs. ICL Israel Chemicals |
| Gatos Silver vs. Endeavour Silver Corp | Gatos Silver vs. Metalla Royalty Streaming | Gatos Silver vs. New Pacific Metals | Gatos Silver vs. Hecla Mining |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |