Correlation Between GENERAL and CF Industries
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By analyzing existing cross correlation between GENERAL MTRS 5 and CF Industries Holdings, you can compare the effects of market volatilities on GENERAL 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 GENERAL with a short position of CF Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of GENERAL and CF Industries.
Diversification Opportunities for GENERAL and CF Industries
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GENERAL and CF Industries is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding GENERAL MTRS 5 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 GENERAL 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 GENERAL MTRS 5 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 GENERAL i.e., GENERAL and CF Industries go up and down completely randomly.
Pair Corralation between GENERAL and CF Industries
Assuming the 90 days trading horizon GENERAL is expected to generate 24.42 times less return on investment than CF Industries. But when comparing it to its historical volatility, GENERAL MTRS 5 is 2.1 times less risky than CF Industries. It trades about 0.01 of its potential returns per unit of risk. CF Industries Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 7,954 in CF Industries Holdings on September 2, 2024 and sell it today you would earn a total of 1,012 from holding CF Industries Holdings or generate 12.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 99.21% |
Values | Daily Returns |
GENERAL MTRS 5 vs. CF Industries Holdings
Performance |
Timeline |
GENERAL MTRS 5 |
CF Industries Holdings |
GENERAL and CF Industries Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GENERAL and CF Industries
The main advantage of trading using opposite GENERAL and CF Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GENERAL 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.GENERAL vs. Edgewell Personal Care | GENERAL vs. Rocky Brands | GENERAL vs. JD Sports Fashion | GENERAL vs. Saia Inc |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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