Correlation Between CVR Energy and Oxford Metrics
Can any of the company-specific risk be diversified away by investing in both CVR Energy and Oxford Metrics 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 Oxford Metrics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVR Energy and Oxford Metrics plc, you can compare the effects of market volatilities on CVR Energy and Oxford Metrics 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 Oxford Metrics. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Energy and Oxford Metrics.
Diversification Opportunities for CVR Energy and Oxford Metrics
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CVR and Oxford is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding CVR Energy and Oxford Metrics plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Metrics 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 Oxford Metrics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Metrics plc has no effect on the direction of CVR Energy i.e., CVR Energy and Oxford Metrics go up and down completely randomly.
Pair Corralation between CVR Energy and Oxford Metrics
Assuming the 90 days trading horizon CVR Energy is expected to generate 1.54 times more return on investment than Oxford Metrics. However, CVR Energy is 1.54 times more volatile than Oxford Metrics plc. It trades about 0.06 of its potential returns per unit of risk. Oxford Metrics plc is currently generating about -0.24 per unit of risk. If you would invest 1,911 in CVR Energy on September 12, 2024 and sell it today you would earn a total of 62.00 from holding CVR Energy or generate 3.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
CVR Energy vs. Oxford Metrics plc
Performance |
| Timeline |
| CVR Energy |
| Oxford Metrics plc |
CVR Energy and Oxford Metrics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVR Energy and Oxford Metrics
The main advantage of trading using opposite CVR Energy and Oxford Metrics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVR Energy position performs unexpectedly, Oxford Metrics 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 Oxford Metrics will offset losses from the drop in Oxford Metrics' long position.| CVR Energy vs. One Media iP | CVR Energy vs. Prosiebensat 1 Media | CVR Energy vs. Bell Food Group | CVR Energy vs. JD Sports Fashion |
| Oxford Metrics vs. Air Products Chemicals | Oxford Metrics vs. Young Cos Brewery | Oxford Metrics vs. Celebrus Technologies plc | Oxford Metrics vs. Martin Marietta Materials |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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