Correlation Between CVR Energy and News Corp
Can any of the company-specific risk be diversified away by investing in both CVR Energy and News 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 News 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 News Corp Cl, you can compare the effects of market volatilities on CVR Energy and News 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 News Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Energy and News Corp.
Diversification Opportunities for CVR Energy and News Corp
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CVR and News is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding CVR Energy and News Corp Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on News Corp Cl 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 News Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of News Corp Cl has no effect on the direction of CVR Energy i.e., CVR Energy and News Corp go up and down completely randomly.
Pair Corralation between CVR Energy and News Corp
Assuming the 90 days trading horizon CVR Energy is expected to generate 3.1 times more return on investment than News Corp. However, CVR Energy is 3.1 times more volatile than News Corp Cl. It trades about 0.21 of its potential returns per unit of risk. News Corp Cl is currently generating about 0.22 per unit of risk. If you would invest 1,638 in CVR Energy on September 3, 2024 and sell it today you would earn a total of 288.00 from holding CVR Energy or generate 17.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
CVR Energy vs. News Corp Cl
Performance |
| Timeline |
| CVR Energy |
| News Corp Cl |
CVR Energy and News Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVR Energy and News Corp
The main advantage of trading using opposite CVR Energy and News Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVR Energy position performs unexpectedly, News 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 News Corp will offset losses from the drop in News Corp's long position.| CVR Energy vs. Compagnie Plastic Omnium | CVR Energy vs. Pfeiffer Vacuum Technology | CVR Energy vs. Spirent Communications plc | CVR Energy vs. Alfa Financial Software |
| News Corp vs. Sunny Optical Technology | News Corp vs. Vitec Software Group | News Corp vs. Take Two Interactive Software | News Corp vs. Zurich Insurance Group |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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