Correlation Between Origen Resources and CF Industries

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Can any of the company-specific risk be diversified away by investing in both Origen Resources 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 Origen Resources and CF Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origen Resources and CF Industries Holdings, you can compare the effects of market volatilities on Origen Resources 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 Origen Resources with a short position of CF Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origen Resources and CF Industries.

Diversification Opportunities for Origen Resources and CF Industries

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Origen and CF Industries is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Origen Resources 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 Origen Resources 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 Origen Resources 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 Origen Resources i.e., Origen Resources and CF Industries go up and down completely randomly.

Pair Corralation between Origen Resources and CF Industries

If you would invest  8,649  in CF Industries Holdings on September 12, 2024 and sell it today you would earn a total of  235.00  from holding CF Industries Holdings or generate 2.72% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy97.62%
ValuesDaily Returns

Origen Resources  vs.  CF Industries Holdings

 Performance 
       Timeline  
Origen Resources 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Origen Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Origen Resources is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.
CF Industries Holdings 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in CF Industries Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, CF Industries reported solid returns over the last few months and may actually be approaching a breakup point.

Origen Resources and CF Industries Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Origen Resources and CF Industries

The main advantage of trading using opposite Origen Resources and CF Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origen Resources 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.
The idea behind Origen Resources and CF Industries Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.

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