Correlation Between Inflection Point and CF Industries
Can any of the company-specific risk be diversified away by investing in both Inflection Point 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 Inflection Point and CF Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inflection Point Acquisition and CF Industries Holdings, you can compare the effects of market volatilities on Inflection Point 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 Inflection Point with a short position of CF Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflection Point and CF Industries.
Diversification Opportunities for Inflection Point and CF Industries
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Inflection and CF Industries is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Inflection Point Acquisition 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 Inflection Point 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 Inflection Point Acquisition 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 Inflection Point i.e., Inflection Point and CF Industries go up and down completely randomly.
Pair Corralation between Inflection Point and CF Industries
Assuming the 90 days horizon Inflection Point Acquisition is expected to generate 25.76 times more return on investment than CF Industries. However, Inflection Point is 25.76 times more volatile than CF Industries Holdings. It trades about 0.05 of its potential returns per unit of risk. CF Industries Holdings is currently generating about 0.02 per unit of risk. If you would invest 0.00 in Inflection Point Acquisition on November 2, 2024 and sell it today you would earn a total of 1,398 from holding Inflection Point Acquisition or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 85.83% |
| Values | Daily Returns |
Inflection Point Acquisition vs. CF Industries Holdings
Performance |
| Timeline |
| Inflection Point Acq |
| CF Industries Holdings |
Inflection Point and CF Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inflection Point and CF Industries
The main advantage of trading using opposite Inflection Point and CF Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflection Point 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.| Inflection Point vs. NETGEAR | Inflection Point vs. Radcom | Inflection Point vs. Lindblad Expeditions Holdings | Inflection Point vs. Zhihu Inc ADR |
| 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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