Correlation Between Yara International and Itafos
Can any of the company-specific risk be diversified away by investing in both Yara International and Itafos 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 Yara International and Itafos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yara International ASA and Itafos Inc, you can compare the effects of market volatilities on Yara International and Itafos 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 Yara International with a short position of Itafos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yara International and Itafos.
Diversification Opportunities for Yara International and Itafos
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Yara and Itafos is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Yara International ASA and Itafos Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itafos Inc and Yara International 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 Yara International ASA are associated (or correlated) with Itafos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itafos Inc has no effect on the direction of Yara International i.e., Yara International and Itafos go up and down completely randomly.
Pair Corralation between Yara International and Itafos
Assuming the 90 days horizon Yara International ASA is expected to under-perform the Itafos. But the pink sheet apears to be less risky and, when comparing its historical volatility, Yara International ASA is 1.34 times less risky than Itafos. The pink sheet trades about -0.22 of its potential returns per unit of risk. The Itafos Inc is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 116.00 in Itafos Inc on August 27, 2024 and sell it today you would earn a total of 4.00 from holding Itafos Inc or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yara International ASA vs. Itafos Inc
Performance |
| Timeline |
| Yara International ASA |
| Itafos Inc |
Yara International and Itafos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yara International and Itafos
The main advantage of trading using opposite Yara International and Itafos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yara International position performs unexpectedly, Itafos 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 Itafos will offset losses from the drop in Itafos' long position.| Yara International vs. Nutrien | Yara International vs. Origin Agritech | Yara International vs. American Vanguard | Yara International vs. Scotts Miracle Gro |
| Itafos vs. ICL Israel Chemicals | Itafos vs. CF Industries Holdings | Itafos vs. Intrepid Potash | Itafos vs. China Green Agriculture |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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