Correlation Between CF Industries and Summa Silver
Can any of the company-specific risk be diversified away by investing in both CF Industries and Summa Silver 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 Summa Silver 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 Summa Silver Corp, you can compare the effects of market volatilities on CF Industries and Summa Silver 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 Summa Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Industries and Summa Silver.
Diversification Opportunities for CF Industries and Summa Silver
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CF Industries and Summa is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding CF Industries Holdings and Summa Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summa Silver Corp 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 Summa Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summa Silver Corp has no effect on the direction of CF Industries i.e., CF Industries and Summa Silver go up and down completely randomly.
Pair Corralation between CF Industries and Summa Silver
Allowing for the 90-day total investment horizon CF Industries Holdings is expected to generate 0.35 times more return on investment than Summa Silver. However, CF Industries Holdings is 2.87 times less risky than Summa Silver. It trades about 0.06 of its potential returns per unit of risk. Summa Silver Corp is currently generating about -0.04 per unit of risk. If you would invest 7,464 in CF Industries Holdings on September 3, 2024 and sell it today you would earn a total of 1,632 from holding CF Industries Holdings or generate 21.86% 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. Summa Silver Corp
Performance |
| Timeline |
| CF Industries Holdings |
| Summa Silver Corp |
CF Industries and Summa Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CF Industries and Summa Silver
The main advantage of trading using opposite CF Industries and Summa Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF Industries position performs unexpectedly, Summa Silver 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 Summa Silver will offset losses from the drop in Summa Silver's long position.| CF Industries vs. Nutrien | CF Industries vs. Intrepid Potash | CF Industries vs. Corteva | CF Industries vs. ICL Israel Chemicals |
| Summa Silver vs. P2 Gold | Summa Silver vs. Enduro Metals | Summa Silver vs. Kodiak Copper Corp | Summa Silver vs. Mirasol Resources |
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 CEOs Directory module to screen CEOs from public companies around the world.
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