Correlation Between CVR Energy and Markel Corp
Can any of the company-specific risk be diversified away by investing in both CVR Energy and Markel Corp 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 Markel Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVR Energy and Markel Corp, you can compare the effects of market volatilities on CVR Energy and Markel Corp 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 Markel Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Energy and Markel Corp.
Diversification Opportunities for CVR Energy and Markel Corp
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CVR and Markel is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding CVR Energy and Markel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Markel Corp 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 Markel Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Markel Corp has no effect on the direction of CVR Energy i.e., CVR Energy and Markel Corp go up and down completely randomly.
Pair Corralation between CVR Energy and Markel Corp
Assuming the 90 days trading horizon CVR Energy is expected to under-perform the Markel Corp. In addition to that, CVR Energy is 2.88 times more volatile than Markel Corp. It trades about -0.05 of its total potential returns per unit of risk. Markel Corp is currently generating about 0.07 per unit of volatility. If you would invest 159,950 in Markel Corp on September 2, 2024 and sell it today you would earn a total of 18,696 from holding Markel Corp or generate 11.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.38% |
| Values | Daily Returns |
CVR Energy vs. Markel Corp
Performance |
| Timeline |
| CVR Energy |
| Markel Corp |
CVR Energy and Markel Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVR Energy and Markel Corp
The main advantage of trading using opposite CVR Energy and Markel Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVR Energy position performs unexpectedly, Markel Corp 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 Markel Corp will offset losses from the drop in Markel Corp's long position.| CVR Energy vs. Uniper SE | CVR Energy vs. Mulberry Group PLC | CVR Energy vs. London Security Plc | CVR Energy vs. Triad Group PLC |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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