Correlation Between CVR Energy and Axfood AB
Can any of the company-specific risk be diversified away by investing in both CVR Energy and Axfood AB 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 Axfood AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVR Energy and Axfood AB, you can compare the effects of market volatilities on CVR Energy and Axfood AB 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 Axfood AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Energy and Axfood AB.
Diversification Opportunities for CVR Energy and Axfood AB
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CVR and Axfood is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding CVR Energy and Axfood AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axfood AB 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 Axfood AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axfood AB has no effect on the direction of CVR Energy i.e., CVR Energy and Axfood AB go up and down completely randomly.
Pair Corralation between CVR Energy and Axfood AB
Assuming the 90 days trading horizon CVR Energy is expected to generate 3.76 times more return on investment than Axfood AB. However, CVR Energy is 3.76 times more volatile than Axfood AB. It trades about 0.23 of its potential returns per unit of risk. Axfood AB is currently generating about -0.01 per unit of risk. If you would invest 1,624 in CVR Energy on September 1, 2024 and sell it today you would earn a total of 322.00 from holding CVR Energy or generate 19.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
CVR Energy vs. Axfood AB
Performance |
| Timeline |
| CVR Energy |
| Axfood AB |
CVR Energy and Axfood AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVR Energy and Axfood AB
The main advantage of trading using opposite CVR Energy and Axfood AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVR Energy position performs unexpectedly, Axfood AB 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 Axfood AB will offset losses from the drop in Axfood AB's long position.| CVR Energy vs. Fevertree Drinks Plc | CVR Energy vs. National Beverage Corp | CVR Energy vs. Charter Communications Cl | CVR Energy vs. Supermarket Income REIT |
| Axfood AB vs. Infrastrutture Wireless Italiane | Axfood AB vs. Nordic Semiconductor ASA | Axfood AB vs. Zoom Video Communications | Axfood AB vs. MTI Wireless Edge |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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