Correlation Between CF Industries and Hitachi Metals
Can any of the company-specific risk be diversified away by investing in both CF Industries and Hitachi Metals 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 Hitachi Metals 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 Hitachi Metals, you can compare the effects of market volatilities on CF Industries and Hitachi Metals 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 Hitachi Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Industries and Hitachi Metals.
Diversification Opportunities for CF Industries and Hitachi Metals
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CF Industries and Hitachi is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding CF Industries Holdings and Hitachi Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hitachi Metals 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 Hitachi Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hitachi Metals has no effect on the direction of CF Industries i.e., CF Industries and Hitachi Metals go up and down completely randomly.
Pair Corralation between CF Industries and Hitachi Metals
If you would invest 5,100 in Hitachi Metals on October 11, 2024 and sell it today you would earn a total of 0.00 from holding Hitachi Metals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
CF Industries Holdings vs. Hitachi Metals
Performance |
| Timeline |
| CF Industries Holdings |
| Hitachi Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CF Industries and Hitachi Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CF Industries and Hitachi Metals
The main advantage of trading using opposite CF Industries and Hitachi Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF Industries position performs unexpectedly, Hitachi Metals 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 Hitachi Metals will offset losses from the drop in Hitachi Metals' long position.| CF Industries vs. Nutrien | CF Industries vs. Intrepid Potash | CF Industries vs. Corteva | CF Industries vs. ICL Israel Chemicals |
| Hitachi Metals vs. Sealed Air | Hitachi Metals vs. CF Industries Holdings | Hitachi Metals vs. Hudson Technologies | Hitachi Metals vs. Flexible Solutions 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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