Correlation Between CVR Energy and Auction Technology
Can any of the company-specific risk be diversified away by investing in both CVR Energy and Auction Technology 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 Auction Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVR Energy and Auction Technology Group, you can compare the effects of market volatilities on CVR Energy and Auction Technology 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 Auction Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Energy and Auction Technology.
Diversification Opportunities for CVR Energy and Auction Technology
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CVR and Auction is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding CVR Energy and Auction Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auction Technology 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 Auction Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auction Technology has no effect on the direction of CVR Energy i.e., CVR Energy and Auction Technology go up and down completely randomly.
Pair Corralation between CVR Energy and Auction Technology
Assuming the 90 days trading horizon CVR Energy is expected to generate 1.1 times more return on investment than Auction Technology. However, CVR Energy is 1.1 times more volatile than Auction Technology Group. It trades about -0.01 of its potential returns per unit of risk. Auction Technology Group is currently generating about -0.01 per unit of risk. If you would invest 2,646 in CVR Energy on September 2, 2024 and sell it today you would lose (720.00) from holding CVR Energy or give up 27.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 84.29% |
| Values | Daily Returns |
CVR Energy vs. Auction Technology Group
Performance |
| Timeline |
| CVR Energy |
| Auction Technology |
CVR Energy and Auction Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVR Energy and Auction Technology
The main advantage of trading using opposite CVR Energy and Auction Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVR Energy position performs unexpectedly, Auction Technology 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 Auction Technology will offset losses from the drop in Auction Technology'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 |
| Auction Technology vs. SupplyMe Capital PLC | Auction Technology vs. Lloyds Banking Group | Auction Technology vs. Premier African Minerals | Auction Technology vs. SANTANDER UK 8 |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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