Correlation Between CF Industries and Paiute Oil
Can any of the company-specific risk be diversified away by investing in both CF Industries and Paiute Oil 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 Paiute Oil 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 Paiute Oil Mining, you can compare the effects of market volatilities on CF Industries and Paiute Oil 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 Paiute Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Industries and Paiute Oil.
Diversification Opportunities for CF Industries and Paiute Oil
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CF Industries and Paiute is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CF Industries Holdings and Paiute Oil Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paiute Oil Mining 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 Paiute Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paiute Oil Mining has no effect on the direction of CF Industries i.e., CF Industries and Paiute Oil go up and down completely randomly.
Pair Corralation between CF Industries and Paiute Oil
If you would invest 8,357 in CF Industries Holdings on September 2, 2024 and sell it today you would earn a total of 609.00 from holding CF Industries Holdings or generate 7.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CF Industries Holdings vs. Paiute Oil Mining
Performance |
| Timeline |
| CF Industries Holdings |
| Paiute Oil Mining |
CF Industries and Paiute Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CF Industries and Paiute Oil
The main advantage of trading using opposite CF Industries and Paiute Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF Industries position performs unexpectedly, Paiute Oil 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 Paiute Oil will offset losses from the drop in Paiute Oil's long position.| CF Industries vs. Nutrien | CF Industries vs. Intrepid Potash | CF Industries vs. Corteva | CF Industries vs. ICL Israel Chemicals |
| Paiute Oil vs. CF Industries Holdings | Paiute Oil vs. United Homes Group | Paiute Oil vs. Stepan Company | Paiute Oil vs. Balchem |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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