Correlation Between CF Industries and Supercom
Can any of the company-specific risk be diversified away by investing in both CF Industries and Supercom 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 Supercom 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 Supercom, you can compare the effects of market volatilities on CF Industries and Supercom 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 Supercom. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Industries and Supercom.
Diversification Opportunities for CF Industries and Supercom
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between CF Industries and Supercom is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding CF Industries Holdings and Supercom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supercom 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 Supercom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supercom has no effect on the direction of CF Industries i.e., CF Industries and Supercom go up and down completely randomly.
Pair Corralation between CF Industries and Supercom
Allowing for the 90-day total investment horizon CF Industries Holdings is expected to generate 0.3 times more return on investment than Supercom. However, CF Industries Holdings is 3.35 times less risky than Supercom. It trades about -0.2 of its potential returns per unit of risk. Supercom is currently generating about -0.21 per unit of risk. If you would invest 8,823 in CF Industries Holdings on November 28, 2024 and sell it today you would lose (982.00) from holding CF Industries Holdings or give up 11.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CF Industries Holdings vs. Supercom
Performance |
| Timeline |
| CF Industries Holdings |
| Supercom |
CF Industries and Supercom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CF Industries and Supercom
The main advantage of trading using opposite CF Industries and Supercom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF Industries position performs unexpectedly, Supercom 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 Supercom will offset losses from the drop in Supercom's long position.| CF Industries vs. Nutrien | CF Industries vs. Intrepid Potash | CF Industries vs. Corteva | CF Industries vs. ICL Israel Chemicals |
| Supercom vs. Zedcor Inc | Supercom vs. SSC Security Services | Supercom vs. Blue Line Protection | Supercom vs. Guardforce AI Co |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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