Correlation Between CVR Energy and Sligro Food
Can any of the company-specific risk be diversified away by investing in both CVR Energy and Sligro Food 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 Sligro Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVR Energy and Sligro Food Group, you can compare the effects of market volatilities on CVR Energy and Sligro Food 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 Sligro Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Energy and Sligro Food.
Diversification Opportunities for CVR Energy and Sligro Food
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CVR and Sligro is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding CVR Energy and Sligro Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sligro Food Group 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 Sligro Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sligro Food Group has no effect on the direction of CVR Energy i.e., CVR Energy and Sligro Food go up and down completely randomly.
Pair Corralation between CVR Energy and Sligro Food
Assuming the 90 days trading horizon CVR Energy is expected to under-perform the Sligro Food. In addition to that, CVR Energy is 6.7 times more volatile than Sligro Food Group. It trades about -0.09 of its total potential returns per unit of risk. Sligro Food Group is currently generating about -0.44 per unit of volatility. If you would invest 1,181 in Sligro Food Group on August 28, 2024 and sell it today you would lose (109.00) from holding Sligro Food Group or give up 9.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVR Energy vs. Sligro Food Group
Performance |
| Timeline |
| CVR Energy |
| Sligro Food Group |
CVR Energy and Sligro Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVR Energy and Sligro Food
The main advantage of trading using opposite CVR Energy and Sligro Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVR Energy position performs unexpectedly, Sligro Food 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 Sligro Food will offset losses from the drop in Sligro Food's long position.| CVR Energy vs. Arrow Electronics | CVR Energy vs. Public Storage | CVR Energy vs. Direct Line Insurance | CVR Energy vs. Scandinavian Tobacco Group |
| Sligro Food vs. Samsung Electronics Co | Sligro Food vs. Samsung Electronics Co | Sligro Food vs. Hyundai Motor | Sligro Food vs. Toyota Motor Corp |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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