Correlation Between Summa Silver and CF Industries
Can any of the company-specific risk be diversified away by investing in both Summa Silver 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 Summa Silver and CF Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summa Silver Corp and CF Industries Holdings, you can compare the effects of market volatilities on Summa Silver 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 Summa Silver with a short position of CF Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summa Silver and CF Industries.
Diversification Opportunities for Summa Silver and CF Industries
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Summa and CF Industries is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Summa Silver Corp 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 Summa Silver 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 Summa Silver Corp 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 Summa Silver i.e., Summa Silver and CF Industries go up and down completely randomly.
Pair Corralation between Summa Silver and CF Industries
Assuming the 90 days horizon Summa Silver Corp is expected to under-perform the CF Industries. In addition to that, Summa Silver is 2.87 times more volatile than CF Industries Holdings. It trades about -0.04 of its total potential returns per unit of risk. CF Industries Holdings is currently generating about 0.06 per unit of volatility. If you would invest 7,464 in CF Industries Holdings on September 3, 2024 and sell it today you would earn a total of 1,632 from holding CF Industries Holdings or generate 21.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summa Silver Corp vs. CF Industries Holdings
Performance |
| Timeline |
| Summa Silver Corp |
| CF Industries Holdings |
Summa Silver and CF Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summa Silver and CF Industries
The main advantage of trading using opposite Summa Silver and CF Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summa Silver 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.| Summa Silver vs. P2 Gold | Summa Silver vs. Enduro Metals | Summa Silver vs. Kodiak Copper Corp | Summa Silver vs. Mirasol Resources |
| 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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