Correlation Between Orbit Garant and CF Industries
Can any of the company-specific risk be diversified away by investing in both Orbit Garant 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 Orbit Garant and CF Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orbit Garant Drilling and CF Industries Holdings, you can compare the effects of market volatilities on Orbit Garant 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 Orbit Garant with a short position of CF Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orbit Garant and CF Industries.
Diversification Opportunities for Orbit Garant and CF Industries
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Orbit and CF Industries is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Orbit Garant Drilling 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 Orbit Garant 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 Orbit Garant Drilling 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 Orbit Garant i.e., Orbit Garant and CF Industries go up and down completely randomly.
Pair Corralation between Orbit Garant and CF Industries
Assuming the 90 days horizon Orbit Garant Drilling is expected to generate 2.54 times more return on investment than CF Industries. However, Orbit Garant is 2.54 times more volatile than CF Industries Holdings. It trades about 0.06 of its potential returns per unit of risk. CF Industries Holdings is currently generating about 0.03 per unit of risk. If you would invest 42.00 in Orbit Garant Drilling on November 9, 2024 and sell it today you would earn a total of 25.00 from holding Orbit Garant Drilling or generate 59.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orbit Garant Drilling vs. CF Industries Holdings
Performance |
| Timeline |
| Orbit Garant Drilling |
| CF Industries Holdings |
Orbit Garant and CF Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orbit Garant and CF Industries
The main advantage of trading using opposite Orbit Garant and CF Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orbit Garant 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.| Orbit Garant vs. Great Western Minerals | Orbit Garant vs. StrikePoint Gold | Orbit Garant vs. Silver Elephant Mining | Orbit Garant vs. Eskay Mining 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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