Correlation Between CVR Energy and F5 Networks
Can any of the company-specific risk be diversified away by investing in both CVR Energy and F5 Networks 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 F5 Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVR Energy and F5 Networks, you can compare the effects of market volatilities on CVR Energy and F5 Networks 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 F5 Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Energy and F5 Networks.
Diversification Opportunities for CVR Energy and F5 Networks
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CVR and 0IL6 is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding CVR Energy and F5 Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on F5 Networks 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 F5 Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of F5 Networks has no effect on the direction of CVR Energy i.e., CVR Energy and F5 Networks go up and down completely randomly.
Pair Corralation between CVR Energy and F5 Networks
Assuming the 90 days trading horizon CVR Energy is expected to generate 3.31 times more return on investment than F5 Networks. However, CVR Energy is 3.31 times more volatile than F5 Networks. It trades about 0.18 of its potential returns per unit of risk. F5 Networks is currently generating about 0.18 per unit of risk. If you would invest 1,687 in CVR Energy on August 31, 2024 and sell it today you would earn a total of 259.00 from holding CVR Energy or generate 15.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVR Energy vs. F5 Networks
Performance |
| Timeline |
| CVR Energy |
| F5 Networks |
CVR Energy and F5 Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVR Energy and F5 Networks
The main advantage of trading using opposite CVR Energy and F5 Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVR Energy position performs unexpectedly, F5 Networks 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 F5 Networks will offset losses from the drop in F5 Networks' long position.| CVR Energy vs. Advanced Medical Solutions | CVR Energy vs. Team Internet Group | CVR Energy vs. Alfa Financial Software | CVR Energy vs. Grand Vision Media |
| F5 Networks vs. Hochschild Mining plc | F5 Networks vs. Flutter Entertainment PLC | F5 Networks vs. Catalyst Media Group | F5 Networks vs. Centaur Media |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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