Correlation Between CF Industries and ORACLE
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By analyzing existing cross correlation between CF Industries Holdings and ORACLE P 65, you can compare the effects of market volatilities on CF Industries and ORACLE 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 ORACLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Industries and ORACLE.
Diversification Opportunities for CF Industries and ORACLE
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CF Industries and ORACLE is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding CF Industries Holdings and ORACLE P 65 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORACLE P 65 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 ORACLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ORACLE P 65 has no effect on the direction of CF Industries i.e., CF Industries and ORACLE go up and down completely randomly.
Pair Corralation between CF Industries and ORACLE
Allowing for the 90-day total investment horizon CF Industries Holdings is expected to generate 1.61 times more return on investment than ORACLE. However, CF Industries is 1.61 times more volatile than ORACLE P 65. It trades about 0.09 of its potential returns per unit of risk. ORACLE P 65 is currently generating about 0.02 per unit of risk. If you would invest 7,312 in CF Industries Holdings on September 3, 2024 and sell it today you would earn a total of 1,654 from holding CF Industries Holdings or generate 22.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.95% |
| Values | Daily Returns |
CF Industries Holdings vs. ORACLE P 65
Performance |
| Timeline |
| CF Industries Holdings |
| ORACLE P 65 |
CF Industries and ORACLE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CF Industries and ORACLE
The main advantage of trading using opposite CF Industries and ORACLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF Industries position performs unexpectedly, ORACLE 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 ORACLE will offset losses from the drop in ORACLE's long position.| CF Industries vs. Nutrien | CF Industries vs. Intrepid Potash | CF Industries vs. Corteva | CF Industries vs. ICL Israel Chemicals |
| ORACLE vs. Hawkins | ORACLE vs. CF Industries Holdings | ORACLE vs. Merit Medical Systems | ORACLE vs. Cumberland Pharmaceuticals |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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