Correlation Between CVR Energy and Idemitsu Kosan
Can any of the company-specific risk be diversified away by investing in both CVR Energy and Idemitsu Kosan 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 Idemitsu Kosan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVR Energy and Idemitsu Kosan Co, you can compare the effects of market volatilities on CVR Energy and Idemitsu Kosan 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 Idemitsu Kosan. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Energy and Idemitsu Kosan.
Diversification Opportunities for CVR Energy and Idemitsu Kosan
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CVR and Idemitsu is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding CVR Energy and Idemitsu Kosan Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Idemitsu Kosan 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 Idemitsu Kosan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Idemitsu Kosan has no effect on the direction of CVR Energy i.e., CVR Energy and Idemitsu Kosan go up and down completely randomly.
Pair Corralation between CVR Energy and Idemitsu Kosan
Considering the 90-day investment horizon CVR Energy is expected to under-perform the Idemitsu Kosan. In addition to that, CVR Energy is 1.75 times more volatile than Idemitsu Kosan Co. It trades about -0.12 of its total potential returns per unit of risk. Idemitsu Kosan Co is currently generating about 0.09 per unit of volatility. If you would invest 1,335 in Idemitsu Kosan Co on August 28, 2024 and sell it today you would earn a total of 74.00 from holding Idemitsu Kosan Co or generate 5.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVR Energy vs. Idemitsu Kosan Co
Performance |
| Timeline |
| CVR Energy |
| Idemitsu Kosan |
CVR Energy and Idemitsu Kosan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVR Energy and Idemitsu Kosan
The main advantage of trading using opposite CVR Energy and Idemitsu Kosan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVR Energy position performs unexpectedly, Idemitsu Kosan 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 Idemitsu Kosan will offset losses from the drop in Idemitsu Kosan'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 |
| Idemitsu Kosan vs. Cosan SA ADR | Idemitsu Kosan vs. Star Gas Partners | Idemitsu Kosan vs. Valvoline | Idemitsu Kosan vs. Zoom Video Communications |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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