Correlation Between Electrovaya Common and CF Industries
Can any of the company-specific risk be diversified away by investing in both Electrovaya Common and CF Industries 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 Electrovaya Common and CF Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electrovaya Common Shares and CF Industries Holdings, you can compare the effects of market volatilities on Electrovaya Common and CF Industries 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 Electrovaya Common with a short position of CF Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrovaya Common and CF Industries.
Diversification Opportunities for Electrovaya Common and CF Industries
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Electrovaya and CF Industries is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Electrovaya Common Shares and CF Industries Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CF Industries Holdings and Electrovaya Common 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 Electrovaya Common Shares are associated (or correlated) with CF Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CF Industries Holdings has no effect on the direction of Electrovaya Common i.e., Electrovaya Common and CF Industries go up and down completely randomly.
Pair Corralation between Electrovaya Common and CF Industries
Given the investment horizon of 90 days Electrovaya Common Shares is expected to generate 1.55 times more return on investment than CF Industries. However, Electrovaya Common is 1.55 times more volatile than CF Industries Holdings. It trades about 0.24 of its potential returns per unit of risk. CF Industries Holdings is currently generating about 0.35 per unit of risk. If you would invest 218.00 in Electrovaya Common Shares on October 21, 2024 and sell it today you would earn a total of 32.00 from holding Electrovaya Common Shares or generate 14.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electrovaya Common Shares vs. CF Industries Holdings
Performance |
| Timeline |
| Electrovaya Common Shares |
| CF Industries Holdings |
Electrovaya Common and CF Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electrovaya Common and CF Industries
The main advantage of trading using opposite Electrovaya Common and CF Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electrovaya Common position performs unexpectedly, CF Industries 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 CF Industries will offset losses from the drop in CF Industries' long position.| Electrovaya Common vs. Shenzhen Investment Holdings | Electrovaya Common vs. Ryanair Holdings PLC | Electrovaya Common vs. flyExclusive, | Electrovaya Common vs. TFI International |
| CF Industries vs. Nutrien | CF Industries vs. Intrepid Potash | CF Industries vs. Corteva | CF Industries vs. ICL Israel Chemicals |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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