Correlation Between Mosaic and CF Industries

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

Diversification Opportunities for Mosaic and CF Industries

0.87
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Mosaic and C4F is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding The Mosaic 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 Mosaic 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 The Mosaic 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 Mosaic i.e., Mosaic and CF Industries go up and down completely randomly.

Pair Corralation between Mosaic and CF Industries

Assuming the 90 days horizon The Mosaic is expected to generate 1.17 times more return on investment than CF Industries. However, Mosaic is 1.17 times more volatile than CF Industries Holdings. It trades about 0.16 of its potential returns per unit of risk. CF Industries Holdings is currently generating about 0.13 per unit of risk. If you would invest  2,438  in The Mosaic on April 23, 2025 and sell it today you would earn a total of  573.00  from holding The Mosaic or generate 23.5% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy98.44%
ValuesDaily Returns

The Mosaic  vs.  CF Industries Holdings

 Performance 
       Timeline  
Mosaic 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in The Mosaic are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Mosaic reported solid returns over the last few months and may actually be approaching a breakup point.
CF Industries Holdings 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in CF Industries Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, CF Industries reported solid returns over the last few months and may actually be approaching a breakup point.

Mosaic and CF Industries Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mosaic and CF Industries

The main advantage of trading using opposite Mosaic and CF Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mosaic 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 The Mosaic 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.
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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