Correlation Between CF Industries and OCPMR

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Can any of the company-specific risk be diversified away by investing in both CF Industries and OCPMR 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 OCPMR 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 OCPMR 375 23 JUN 31, you can compare the effects of market volatilities on CF Industries and OCPMR 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 OCPMR. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Industries and OCPMR.

Diversification Opportunities for CF Industries and OCPMR

-0.16
  Correlation Coefficient

Good diversification

The 3 months correlation between CF Industries and OCPMR is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding CF Industries Holdings and OCPMR 375 23 JUN 31 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OCPMR 375 23 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 OCPMR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OCPMR 375 23 has no effect on the direction of CF Industries i.e., CF Industries and OCPMR go up and down completely randomly.

Pair Corralation between CF Industries and OCPMR

Allowing for the 90-day total investment horizon CF Industries Holdings is expected to generate 0.54 times more return on investment than OCPMR. However, CF Industries Holdings is 1.86 times less risky than OCPMR. It trades about 0.06 of its potential returns per unit of risk. OCPMR 375 23 JUN 31 is currently generating about -0.25 per unit of risk. If you would invest  8,649  in CF Industries Holdings on September 13, 2024 and sell it today you would earn a total of  333.00  from holding CF Industries Holdings or generate 3.85% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy42.86%
ValuesDaily Returns

CF Industries Holdings  vs.  OCPMR 375 23 JUN 31

 Performance 
       Timeline  
CF Industries Holdings 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in CF Industries Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent technical and fundamental indicators, CF Industries reported solid returns over the last few months and may actually be approaching a breakup point.
OCPMR 375 23 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days OCPMR 375 23 JUN 31 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for OCPMR 375 23 JUN 31 investors.

CF Industries and OCPMR Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CF Industries and OCPMR

The main advantage of trading using opposite CF Industries and OCPMR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF Industries position performs unexpectedly, OCPMR 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 OCPMR will offset losses from the drop in OCPMR's long position.
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The idea behind CF Industries Holdings and OCPMR 375 23 JUN 31 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

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