Correlation Between CF Industries and Vista Gold
Can any of the company-specific risk be diversified away by investing in both CF Industries and Vista Gold 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 Vista Gold 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 Vista Gold, you can compare the effects of market volatilities on CF Industries and Vista Gold 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 Vista Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Industries and Vista Gold.
Diversification Opportunities for CF Industries and Vista Gold
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CF Industries and Vista is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding CF Industries Holdings and Vista Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vista Gold 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 Vista Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vista Gold has no effect on the direction of CF Industries i.e., CF Industries and Vista Gold go up and down completely randomly.
Pair Corralation between CF Industries and Vista Gold
Allowing for the 90-day total investment horizon CF Industries is expected to generate 1.35 times less return on investment than Vista Gold. But when comparing it to its historical volatility, CF Industries Holdings is 1.0 times less risky than Vista Gold. It trades about 0.14 of its potential returns per unit of risk. Vista Gold is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 58.00 in Vista Gold on November 3, 2024 and sell it today you would earn a total of 6.00 from holding Vista Gold or generate 10.34% 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. Vista Gold
Performance |
| Timeline |
| CF Industries Holdings |
| Vista Gold |
CF Industries and Vista Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CF Industries and Vista Gold
The main advantage of trading using opposite CF Industries and Vista Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF Industries position performs unexpectedly, Vista Gold 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 Vista Gold will offset losses from the drop in Vista Gold's long position.| CF Industries vs. Nutrien | CF Industries vs. Intrepid Potash | CF Industries vs. Corteva | CF Industries vs. ICL Israel Chemicals |
| Vista Gold vs. International Tower Hill | Vista Gold vs. Harmony Gold Mining | Vista Gold vs. Seabridge Gold | Vista Gold vs. IAMGold |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |