Correlation Between CVR Energy and Compass Group
Can any of the company-specific risk be diversified away by investing in both CVR Energy and Compass Group 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 Compass Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVR Energy and Compass Group PLC, you can compare the effects of market volatilities on CVR Energy and Compass Group 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 Compass Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Energy and Compass Group.
Diversification Opportunities for CVR Energy and Compass Group
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CVR and Compass is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding CVR Energy and Compass Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compass Group PLC 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 Compass Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compass Group PLC has no effect on the direction of CVR Energy i.e., CVR Energy and Compass Group go up and down completely randomly.
Pair Corralation between CVR Energy and Compass Group
Assuming the 90 days trading horizon CVR Energy is expected to under-perform the Compass Group. In addition to that, CVR Energy is 3.15 times more volatile than Compass Group PLC. It trades about -0.02 of its total potential returns per unit of risk. Compass Group PLC is currently generating about 0.09 per unit of volatility. If you would invest 181,554 in Compass Group PLC on November 2, 2024 and sell it today you would earn a total of 94,646 from holding Compass Group PLC or generate 52.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 87.35% |
| Values | Daily Returns |
CVR Energy vs. Compass Group PLC
Performance |
| Timeline |
| CVR Energy |
| Compass Group PLC |
CVR Energy and Compass Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVR Energy and Compass Group
The main advantage of trading using opposite CVR Energy and Compass Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVR Energy position performs unexpectedly, Compass Group 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 Compass Group will offset losses from the drop in Compass Group's long position.| CVR Energy vs. Lindsell Train Investment | CVR Energy vs. Zegona Communications Plc | CVR Energy vs. Broadridge Financial Solutions | CVR Energy vs. Fonix Mobile plc |
| Compass Group vs. Take Two Interactive Software | Compass Group vs. Micron Technology | Compass Group vs. Aptitude Software Group | Compass Group vs. Naked Wines plc |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Stocks Directory Find actively traded stocks across global markets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |