Correlation Between CVR Energy and Shoprite Holdings
Can any of the company-specific risk be diversified away by investing in both CVR Energy and Shoprite Holdings 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 Shoprite Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVR Energy and Shoprite Holdings Ltd, you can compare the effects of market volatilities on CVR Energy and Shoprite Holdings 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 Shoprite Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Energy and Shoprite Holdings.
Diversification Opportunities for CVR Energy and Shoprite Holdings
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CVR and Shoprite is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding CVR Energy and Shoprite Holdings Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shoprite Holdings 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 Shoprite Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shoprite Holdings has no effect on the direction of CVR Energy i.e., CVR Energy and Shoprite Holdings go up and down completely randomly.
Pair Corralation between CVR Energy and Shoprite Holdings
Considering the 90-day investment horizon CVR Energy is expected to generate 1.49 times more return on investment than Shoprite Holdings. However, CVR Energy is 1.49 times more volatile than Shoprite Holdings Ltd. It trades about 0.28 of its potential returns per unit of risk. Shoprite Holdings Ltd is currently generating about -0.08 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVR Energy vs. Shoprite Holdings Ltd
Performance |
| Timeline |
| CVR Energy |
| Shoprite Holdings |
CVR Energy and Shoprite Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVR Energy and Shoprite Holdings
The main advantage of trading using opposite CVR Energy and Shoprite Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVR Energy position performs unexpectedly, Shoprite Holdings 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 Shoprite Holdings will offset losses from the drop in Shoprite Holdings' 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 |
| Shoprite Holdings vs. Sanlam Ltd PK | Shoprite Holdings vs. Vodacom Group Ltd | Shoprite Holdings vs. Woolworths Holdings Ltd | Shoprite Holdings vs. Standard Bank Group |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |