Correlation Between CVR Energy and Kingspan Group
Can any of the company-specific risk be diversified away by investing in both CVR Energy and Kingspan Group 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 Kingspan Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVR Energy and Kingspan Group PLC, you can compare the effects of market volatilities on CVR Energy and Kingspan Group 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 Kingspan Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Energy and Kingspan Group.
Diversification Opportunities for CVR Energy and Kingspan Group
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CVR and Kingspan is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding CVR Energy and Kingspan Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingspan Group PLC 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 Kingspan Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingspan Group PLC has no effect on the direction of CVR Energy i.e., CVR Energy and Kingspan Group go up and down completely randomly.
Pair Corralation between CVR Energy and Kingspan Group
Considering the 90-day investment horizon CVR Energy is expected to generate 1.67 times more return on investment than Kingspan Group. However, CVR Energy is 1.67 times more volatile than Kingspan Group PLC. It trades about 0.0 of its potential returns per unit of risk. Kingspan Group PLC is currently generating about -0.01 per unit of risk. If you would invest 1,859 in CVR Energy on November 9, 2024 and sell it today you would lose (20.00) from holding CVR Energy or give up 1.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVR Energy vs. Kingspan Group PLC
Performance |
| Timeline |
| CVR Energy |
| Kingspan Group PLC |
CVR Energy and Kingspan Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVR Energy and Kingspan Group
The main advantage of trading using opposite CVR Energy and Kingspan Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVR Energy position performs unexpectedly, Kingspan Group 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 Kingspan Group will offset losses from the drop in Kingspan Group'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 |
| Kingspan Group vs. Carrier Global Corp | Kingspan Group vs. Johnson Controls International | Kingspan Group vs. Lennox International | Kingspan Group vs. Masco |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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