Correlation Between Kingboard Chemical and CF Industries
Can any of the company-specific risk be diversified away by investing in both Kingboard Chemical 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 Kingboard Chemical and CF Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kingboard Chemical Holdings and CF Industries Holdings, you can compare the effects of market volatilities on Kingboard Chemical 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 Kingboard Chemical with a short position of CF Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingboard Chemical and CF Industries.
Diversification Opportunities for Kingboard Chemical and CF Industries
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kingboard and CF Industries is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Kingboard Chemical Holdings 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 Kingboard Chemical 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 Kingboard Chemical Holdings 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 Kingboard Chemical i.e., Kingboard Chemical and CF Industries go up and down completely randomly.
Pair Corralation between Kingboard Chemical and CF Industries
Assuming the 90 days horizon Kingboard Chemical is expected to generate 319.5 times less return on investment than CF Industries. But when comparing it to its historical volatility, Kingboard Chemical Holdings is 5.97 times less risky than CF Industries. It trades about 0.0 of its potential returns per unit of risk. CF Industries Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 7,426 in CF Industries Holdings on November 9, 2024 and sell it today you would earn a total of 986.00 from holding CF Industries Holdings or generate 13.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingboard Chemical Holdings vs. CF Industries Holdings
Performance |
| Timeline |
| Kingboard Chemical |
| CF Industries Holdings |
Kingboard Chemical and CF Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingboard Chemical and CF Industries
The main advantage of trading using opposite Kingboard Chemical and CF Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingboard Chemical 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.| Kingboard Chemical vs. Getty Realty | Kingboard Chemical vs. Mako Mining Corp | Kingboard Chemical vs. Cedar Realty Trust | Kingboard Chemical vs. Lithium Americas Corp |
| 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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