Correlation Between CVR Energy and Delek Energy
Can any of the company-specific risk be diversified away by investing in both CVR Energy and Delek 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 CVR Energy and Delek Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVR Energy and Delek Energy, you can compare the effects of market volatilities on CVR Energy and Delek 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 CVR Energy with a short position of Delek Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Energy and Delek Energy.
Diversification Opportunities for CVR Energy and Delek Energy
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CVR and Delek is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding CVR Energy and Delek Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Energy 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 Delek Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Energy has no effect on the direction of CVR Energy i.e., CVR Energy and Delek Energy go up and down completely randomly.
Pair Corralation between CVR Energy and Delek Energy
Considering the 90-day investment horizon CVR Energy is expected to under-perform the Delek Energy. In addition to that, CVR Energy is 1.54 times more volatile than Delek Energy. It trades about -0.08 of its total potential returns per unit of risk. Delek Energy is currently generating about -0.05 per unit of volatility. If you would invest 2,052 in Delek Energy on August 23, 2024 and sell it today you would lose (213.00) from holding Delek Energy or give up 10.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVR Energy vs. Delek Energy
Performance |
| Timeline |
| CVR Energy |
| Delek Energy |
CVR Energy and Delek Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVR Energy and Delek Energy
The main advantage of trading using opposite CVR Energy and Delek Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVR Energy position performs unexpectedly, Delek 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 Delek Energy will offset losses from the drop in Delek Energy'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 |
| Delek Energy vs. Crossamerica Partners LP | Delek Energy vs. Sunoco LP | Delek Energy vs. CVR Energy | Delek Energy vs. Phillips 66 |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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