Correlation Between CVR Energy and DCC PLC
Can any of the company-specific risk be diversified away by investing in both CVR Energy and DCC PLC 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 DCC PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVR Energy and DCC PLC ADR, you can compare the effects of market volatilities on CVR Energy and DCC PLC 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 DCC PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Energy and DCC PLC.
Diversification Opportunities for CVR Energy and DCC PLC
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between CVR and DCC is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding CVR Energy and DCC PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DCC PLC ADR 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 DCC PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DCC PLC ADR has no effect on the direction of CVR Energy i.e., CVR Energy and DCC PLC go up and down completely randomly.
Pair Corralation between CVR Energy and DCC PLC
Considering the 90-day investment horizon CVR Energy is expected to under-perform the DCC PLC. In addition to that, CVR Energy is 20.45 times more volatile than DCC PLC ADR. It trades about -0.06 of its total potential returns per unit of risk. DCC PLC ADR is currently generating about 0.09 per unit of volatility. If you would invest 2,213 in DCC PLC ADR on September 5, 2024 and sell it today you would earn a total of 42.00 from holding DCC PLC ADR or generate 1.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVR Energy vs. DCC PLC ADR
Performance |
| Timeline |
| CVR Energy |
| DCC PLC ADR |
CVR Energy and DCC PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVR Energy and DCC PLC
The main advantage of trading using opposite CVR Energy and DCC PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVR Energy position performs unexpectedly, DCC PLC 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 DCC PLC will offset losses from the drop in DCC PLC's long position.| CVR Energy vs. Delek Logistics Partners | CVR Energy vs. PBF Energy | CVR Energy vs. HF Sinclair Corp | CVR Energy vs. Par Pacific Holdings |
| DCC PLC vs. Ultrapar Participacoes SA | DCC PLC vs. Sunoco LP | DCC PLC vs. HF Sinclair Corp | DCC PLC vs. Delek Energy |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |