Correlation Between CVR Energy and Summit Materials
Can any of the company-specific risk be diversified away by investing in both CVR Energy and Summit Materials 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 Summit Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVR Energy and Summit Materials Cl, you can compare the effects of market volatilities on CVR Energy and Summit Materials 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 Summit Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Energy and Summit Materials.
Diversification Opportunities for CVR Energy and Summit Materials
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CVR and Summit is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding CVR Energy and Summit Materials Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Materials 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 Summit Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Materials has no effect on the direction of CVR Energy i.e., CVR Energy and Summit Materials go up and down completely randomly.
Pair Corralation between CVR Energy and Summit Materials
Assuming the 90 days trading horizon CVR Energy is expected to under-perform the Summit Materials. In addition to that, CVR Energy is 1.38 times more volatile than Summit Materials Cl. It trades about -0.01 of its total potential returns per unit of risk. Summit Materials Cl is currently generating about 0.06 per unit of volatility. If you would invest 3,435 in Summit Materials Cl on August 31, 2024 and sell it today you would earn a total of 1,666 from holding Summit Materials Cl or generate 48.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 89.47% |
| Values | Daily Returns |
CVR Energy vs. Summit Materials Cl
Performance |
| Timeline |
| CVR Energy |
| Summit Materials |
CVR Energy and Summit Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVR Energy and Summit Materials
The main advantage of trading using opposite CVR Energy and Summit Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVR Energy position performs unexpectedly, Summit Materials 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 Summit Materials will offset losses from the drop in Summit Materials' 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 |
| Summit Materials vs. The Mercantile Investment | Summit Materials vs. National Beverage Corp | Summit Materials vs. Capital Drilling | Summit Materials vs. Bankers Investment Trust |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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