Correlation Between CVR Energy and AstraZeneca PLC
Can any of the company-specific risk be diversified away by investing in both CVR Energy and AstraZeneca PLC 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 CVR Energy and AstraZeneca PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVR Energy and AstraZeneca PLC ADR, you can compare the effects of market volatilities on CVR Energy and AstraZeneca PLC 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 CVR Energy with a short position of AstraZeneca PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Energy and AstraZeneca PLC.
Diversification Opportunities for CVR Energy and AstraZeneca PLC
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CVR and AstraZeneca is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding CVR Energy and AstraZeneca PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AstraZeneca PLC ADR and CVR Energy 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 CVR Energy are associated (or correlated) with AstraZeneca PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AstraZeneca PLC ADR has no effect on the direction of CVR Energy i.e., CVR Energy and AstraZeneca PLC go up and down completely randomly.
Pair Corralation between CVR Energy and AstraZeneca PLC
Assuming the 90 days trading horizon CVR Energy is expected to under-perform the AstraZeneca PLC. In addition to that, CVR Energy is 2.57 times more volatile than AstraZeneca PLC ADR. It trades about -0.06 of its total potential returns per unit of risk. AstraZeneca PLC ADR is currently generating about -0.08 per unit of volatility. If you would invest 7,712 in AstraZeneca PLC ADR on August 29, 2024 and sell it today you would lose (1,121) from holding AstraZeneca PLC ADR or give up 14.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.2% |
| Values | Daily Returns |
CVR Energy vs. AstraZeneca PLC ADR
Performance |
| Timeline |
| CVR Energy |
| AstraZeneca PLC ADR |
CVR Energy and AstraZeneca PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVR Energy and AstraZeneca PLC
The main advantage of trading using opposite CVR Energy and AstraZeneca PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVR Energy position performs unexpectedly, AstraZeneca PLC 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 AstraZeneca PLC will offset losses from the drop in AstraZeneca PLC's long position.| CVR Energy vs. Bytes Technology | CVR Energy vs. DXC Technology Co | CVR Energy vs. United Airlines Holdings | CVR Energy vs. Check Point Software |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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