Correlation Between CF Industries and NioCorp Developments
Can any of the company-specific risk be diversified away by investing in both CF Industries and NioCorp Developments 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 NioCorp Developments 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 NioCorp Developments Ltd, you can compare the effects of market volatilities on CF Industries and NioCorp Developments 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 NioCorp Developments. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Industries and NioCorp Developments.
Diversification Opportunities for CF Industries and NioCorp Developments
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CF Industries and NioCorp is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding CF Industries Holdings and NioCorp Developments Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NioCorp Developments 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 NioCorp Developments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NioCorp Developments has no effect on the direction of CF Industries i.e., CF Industries and NioCorp Developments go up and down completely randomly.
Pair Corralation between CF Industries and NioCorp Developments
Allowing for the 90-day total investment horizon CF Industries Holdings is expected to generate 0.44 times more return on investment than NioCorp Developments. However, CF Industries Holdings is 2.26 times less risky than NioCorp Developments. It trades about 0.27 of its potential returns per unit of risk. NioCorp Developments Ltd is currently generating about -0.37 per unit of risk. If you would invest 8,175 in CF Industries Holdings on September 1, 2024 and sell it today you would earn a total of 791.00 from holding CF Industries Holdings or generate 9.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CF Industries Holdings vs. NioCorp Developments Ltd
Performance |
| Timeline |
| CF Industries Holdings |
| NioCorp Developments |
CF Industries and NioCorp Developments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CF Industries and NioCorp Developments
The main advantage of trading using opposite CF Industries and NioCorp Developments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF Industries position performs unexpectedly, NioCorp Developments 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 NioCorp Developments will offset losses from the drop in NioCorp Developments' long position.| CF Industries vs. Nutrien | CF Industries vs. Intrepid Potash | CF Industries vs. Corteva | CF Industries vs. ICL Israel Chemicals |
| NioCorp Developments vs. Paiute Oil Mining | NioCorp Developments vs. Marfrig Global Foods | NioCorp Developments vs. Emerson Radio | NioCorp Developments vs. Reservoir Media |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |