Correlation Between CF Industries and Selina Hospitality
Can any of the company-specific risk be diversified away by investing in both CF Industries and Selina Hospitality 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 Selina Hospitality 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 Selina Hospitality PLC, you can compare the effects of market volatilities on CF Industries and Selina Hospitality 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 Selina Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Industries and Selina Hospitality.
Diversification Opportunities for CF Industries and Selina Hospitality
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between CF Industries and Selina is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding CF Industries Holdings and Selina Hospitality PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selina Hospitality PLC 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 Selina Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selina Hospitality PLC has no effect on the direction of CF Industries i.e., CF Industries and Selina Hospitality go up and down completely randomly.
Pair Corralation between CF Industries and Selina Hospitality
If you would invest 8,591 in CF Industries Holdings on September 5, 2024 and sell it today you would earn a total of 823.00 from holding CF Industries Holdings or generate 9.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
CF Industries Holdings vs. Selina Hospitality PLC
Performance |
| Timeline |
| CF Industries Holdings |
| Selina Hospitality PLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CF Industries and Selina Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CF Industries and Selina Hospitality
The main advantage of trading using opposite CF Industries and Selina Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF Industries position performs unexpectedly, Selina Hospitality 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 Selina Hospitality will offset losses from the drop in Selina Hospitality's long position.| CF Industries vs. Nutrien | CF Industries vs. Intrepid Potash | CF Industries vs. Corteva | CF Industries vs. ICL Israel Chemicals |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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