Correlation Between Crossamerica Partners and CVR Energy
Can any of the company-specific risk be diversified away by investing in both Crossamerica Partners 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 Crossamerica Partners and CVR Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crossamerica Partners LP and CVR Energy, you can compare the effects of market volatilities on Crossamerica Partners 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 Crossamerica Partners with a short position of CVR Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crossamerica Partners and CVR Energy.
Diversification Opportunities for Crossamerica Partners and CVR Energy
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Crossamerica and CVR is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Crossamerica Partners LP and CVR Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVR Energy and Crossamerica Partners 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 Crossamerica Partners LP 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 Crossamerica Partners i.e., Crossamerica Partners and CVR Energy go up and down completely randomly.
Pair Corralation between Crossamerica Partners and CVR Energy
Given the investment horizon of 90 days Crossamerica Partners is expected to generate 1.72 times less return on investment than CVR Energy. But when comparing it to its historical volatility, Crossamerica Partners LP is 2.05 times less risky than CVR Energy. It trades about 0.14 of its potential returns per unit of risk. CVR Energy is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,597 in CVR Energy on November 1, 2024 and sell it today you would earn a total of 310.00 from holding CVR Energy or generate 19.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crossamerica Partners LP vs. CVR Energy
Performance |
| Timeline |
| Crossamerica Partners |
| CVR Energy |
Crossamerica Partners and CVR Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crossamerica Partners and CVR Energy
The main advantage of trading using opposite Crossamerica Partners and CVR Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crossamerica Partners 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.| Crossamerica Partners vs. Delek Energy | Crossamerica Partners vs. Sunoco LP | Crossamerica Partners vs. CVR Energy | Crossamerica Partners vs. Phillips 66 |
| CVR Energy vs. Delek Logistics Partners | CVR Energy vs. PBF Energy | CVR Energy vs. HF Sinclair Corp | CVR Energy vs. Par Pacific Holdings |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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