Correlation Between CVR Energy and HCB Financial
Can any of the company-specific risk be diversified away by investing in both CVR Energy and HCB Financial 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 HCB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVR Energy and HCB Financial Corp, you can compare the effects of market volatilities on CVR Energy and HCB Financial 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 HCB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Energy and HCB Financial.
Diversification Opportunities for CVR Energy and HCB Financial
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CVR and HCB is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding CVR Energy and HCB Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCB Financial Corp 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 HCB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HCB Financial Corp has no effect on the direction of CVR Energy i.e., CVR Energy and HCB Financial go up and down completely randomly.
Pair Corralation between CVR Energy and HCB Financial
Considering the 90-day investment horizon CVR Energy is expected to under-perform the HCB Financial. But the stock apears to be less risky and, when comparing its historical volatility, CVR Energy is 1.07 times less risky than HCB Financial. The stock trades about 0.0 of its potential returns per unit of risk. The HCB Financial Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,199 in HCB Financial Corp on September 4, 2024 and sell it today you would earn a total of 801.00 from holding HCB Financial Corp or generate 36.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 60.32% |
| Values | Daily Returns |
CVR Energy vs. HCB Financial Corp
Performance |
| Timeline |
| CVR Energy |
| HCB Financial Corp |
CVR Energy and HCB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVR Energy and HCB Financial
The main advantage of trading using opposite CVR Energy and HCB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVR Energy position performs unexpectedly, HCB Financial 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 HCB Financial will offset losses from the drop in HCB Financial'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 |
| HCB Financial vs. First Hawaiian | HCB Financial vs. Central Pacific Financial | HCB Financial vs. Territorial Bancorp | HCB Financial 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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