Correlation Between Entegris and CF Industries
Can any of the company-specific risk be diversified away by investing in both Entegris 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 Entegris and CF Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Entegris and CF Industries Holdings, you can compare the effects of market volatilities on Entegris 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 Entegris with a short position of CF Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entegris and CF Industries.
Diversification Opportunities for Entegris and CF Industries
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Entegris and CF Industries is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Entegris 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 Entegris 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 Entegris 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 Entegris i.e., Entegris and CF Industries go up and down completely randomly.
Pair Corralation between Entegris and CF Industries
Given the investment horizon of 90 days Entegris is expected to generate 25.8 times less return on investment than CF Industries. In addition to that, Entegris is 1.6 times more volatile than CF Industries Holdings. It trades about 0.0 of its total potential returns per unit of risk. CF Industries Holdings is currently generating about 0.14 per unit of volatility. If you would invest 7,869 in CF Industries Holdings on September 13, 2024 and sell it today you would earn a total of 1,113 from holding CF Industries Holdings or generate 14.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Entegris vs. CF Industries Holdings
Performance |
Timeline |
Entegris |
CF Industries Holdings |
Entegris and CF Industries Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Entegris and CF Industries
The main advantage of trading using opposite Entegris and CF Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entegris 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.Entegris vs. ON Semiconductor | Entegris vs. Monolithic Power Systems | Entegris vs. Globalfoundries | Entegris vs. Wisekey International Holding |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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