Correlation Between Bell Food and CVR Energy
Can any of the company-specific risk be diversified away by investing in both Bell Food and CVR Energy 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 Bell Food and CVR Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bell Food Group and CVR Energy, you can compare the effects of market volatilities on Bell Food and CVR Energy 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 Bell Food with a short position of CVR Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bell Food and CVR Energy.
Diversification Opportunities for Bell Food and CVR Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bell and CVR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bell Food Group and CVR Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVR Energy and Bell Food 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 Bell Food Group are associated (or correlated) with CVR Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVR Energy has no effect on the direction of Bell Food i.e., Bell Food and CVR Energy go up and down completely randomly.
Pair Corralation between Bell Food and CVR Energy
Assuming the 90 days trading horizon Bell Food is expected to generate 7.29 times less return on investment than CVR Energy. But when comparing it to its historical volatility, Bell Food Group is 10.44 times less risky than CVR Energy. It trades about 0.16 of its potential returns per unit of risk. CVR Energy is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,785 in CVR Energy on August 30, 2024 and sell it today you would earn a total of 161.00 from holding CVR Energy or generate 9.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bell Food Group vs. CVR Energy
Performance |
| Timeline |
| Bell Food Group |
| CVR Energy |
Bell Food and CVR Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bell Food and CVR Energy
The main advantage of trading using opposite Bell Food and CVR Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bell Food position performs unexpectedly, CVR Energy 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 CVR Energy will offset losses from the drop in CVR Energy's long position.| Bell Food vs. Tungsten West PLC | Bell Food vs. Argo Group Limited | Bell Food vs. Hardide PLC | Bell Food vs. Versarien PLC |
| CVR Energy vs. Edita Food Industries | CVR Energy vs. OneSavings Bank PLC | CVR Energy vs. Bell Food Group | CVR Energy vs. Tyson Foods Cl |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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