Correlation Between Enlightify and CF Industries
Can any of the company-specific risk be diversified away by investing in both Enlightify 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 Enlightify and CF Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enlightify and CF Industries Holdings, you can compare the effects of market volatilities on Enlightify 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 Enlightify with a short position of CF Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enlightify and CF Industries.
Diversification Opportunities for Enlightify and CF Industries
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enlightify and CF Industries is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Enlightify 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 Enlightify 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 Enlightify 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 Enlightify i.e., Enlightify and CF Industries go up and down completely randomly.
Pair Corralation between Enlightify and CF Industries
Given the investment horizon of 90 days Enlightify is expected to generate 3.58 times more return on investment than CF Industries. However, Enlightify is 3.58 times more volatile than CF Industries Holdings. It trades about 0.17 of its potential returns per unit of risk. CF Industries Holdings is currently generating about 0.09 per unit of risk. If you would invest 106.00 in Enlightify on November 4, 2024 and sell it today you would earn a total of 30.00 from holding Enlightify or generate 28.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enlightify vs. CF Industries Holdings
Performance |
| Timeline |
| Enlightify |
| CF Industries Holdings |
Enlightify and CF Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enlightify and CF Industries
The main advantage of trading using opposite Enlightify and CF Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enlightify 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.| Enlightify vs. Grupo Aeroportuario del | Enlightify vs. Finnair Oyj | Enlightify vs. Westinghouse Air Brake | Enlightify vs. Porvair plc |
| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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