Correlation Between CVR Energy and Highlands Bankshares
Can any of the company-specific risk be diversified away by investing in both CVR Energy and Highlands Bankshares 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 Highlands Bankshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVR Energy and Highlands Bankshares, you can compare the effects of market volatilities on CVR Energy and Highlands Bankshares 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 Highlands Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Energy and Highlands Bankshares.
Diversification Opportunities for CVR Energy and Highlands Bankshares
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CVR and Highlands is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding CVR Energy and Highlands Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highlands Bankshares 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 Highlands Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highlands Bankshares has no effect on the direction of CVR Energy i.e., CVR Energy and Highlands Bankshares go up and down completely randomly.
Pair Corralation between CVR Energy and Highlands Bankshares
Considering the 90-day investment horizon CVR Energy is expected to generate 4.17 times more return on investment than Highlands Bankshares. However, CVR Energy is 4.17 times more volatile than Highlands Bankshares. It trades about 0.28 of its potential returns per unit of risk. Highlands Bankshares is currently generating about 0.36 per unit of risk. If you would invest 1,644 in CVR Energy on September 4, 2024 and sell it today you would earn a total of 324.00 from holding CVR Energy or generate 19.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
CVR Energy vs. Highlands Bankshares
Performance |
| Timeline |
| CVR Energy |
| Highlands Bankshares |
CVR Energy and Highlands Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVR Energy and Highlands Bankshares
The main advantage of trading using opposite CVR Energy and Highlands Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVR Energy position performs unexpectedly, Highlands Bankshares 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 Highlands Bankshares will offset losses from the drop in Highlands Bankshares' 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 |
| Highlands Bankshares vs. First Hawaiian | Highlands Bankshares vs. Central Pacific Financial | Highlands Bankshares vs. Territorial Bancorp | Highlands Bankshares vs. Comerica |
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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