CF INDUSTRIES HOLDINGS, INC.

41.64 -0.31 (-0.74%) Sell

CF investors dump it for better alternatives

13 min read

CF INDUSTRIES HOLDINGS, INC. was among the worst performers on Thursday. It lost -0.74% to close at 41.64. It is currently trading -25% below it's 52 week high of 56.06.

[Themes containing CF]

CF is currently in a down trend. The current bearish signal has generated a profit of +11.1% for investors in the last three months.

Trend

CF has been underperforming the SP500 index in recent time, after having outperformed till 4 Jan, 2016. Over the last 2 years 11 months and 9 days, CF underperformed the SP500 index on 48% days. Which indicates that on days CF underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

CF returned losses on 51% days in the last three months. During this time, it delivered on average -0.3% per day. It delivered it's worst daily return of -9.1%, during this period, on Wednesday, 14 Nov, 2018. There was initially a bullish trend during this period which started on 14 Sep, 2018 and went on till 20 Sep, 2018. The bullish trend returned +3.38% to investors. This was followed by a bearish trend that started on 17 Oct, 2018 and ended on 24 Oct, 2018. This bearish trend lost -16.28% of investor capital.

CF had 6 profitable and 6 loss making months over the last year. During the last year, CF underperformed SP500 index on monthly return basis. CF significantly outperformed SP500 index in Aug 2018, when it returned +16.95% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. CF and SP500 index, both had periods of 6 consecutive profitable months.

"Derivatives are financial weapons of mass destruction.

CF is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in CF's volatility from 14 Sep, 2018 to 2 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that CF has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.

Investors trading in CF derivatives at this moment can consider 'Long Straddle' options strategy to receive better risk-adjusted returns.

SP500 index has more chance of extreme outcomes than CF. Therefore, SP500 must receive a lower allocation than CF in your portfolio. SP500 index usually has shorter drawdown period than CF.

Based on your interest in CF you may find it interesting to know that OPNT, EPIX and IMTE are all extremely risky investment candidates that must be evaluated carefully. Investors with low risk profile are better off avoiding them till their performance becomes more consistent.

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