Correlation Between CVR Energy and Ultrapar Participacoes
Can any of the company-specific risk be diversified away by investing in both CVR Energy and Ultrapar Participacoes 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 Ultrapar Participacoes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVR Energy and Ultrapar Participacoes SA, you can compare the effects of market volatilities on CVR Energy and Ultrapar Participacoes 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 Ultrapar Participacoes. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Energy and Ultrapar Participacoes.
Diversification Opportunities for CVR Energy and Ultrapar Participacoes
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CVR and Ultrapar is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding CVR Energy and Ultrapar Participacoes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultrapar Participacoes 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 Ultrapar Participacoes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultrapar Participacoes has no effect on the direction of CVR Energy i.e., CVR Energy and Ultrapar Participacoes go up and down completely randomly.
Pair Corralation between CVR Energy and Ultrapar Participacoes
Considering the 90-day investment horizon CVR Energy is expected to under-perform the Ultrapar Participacoes. In addition to that, CVR Energy is 1.54 times more volatile than Ultrapar Participacoes SA. It trades about -0.08 of its total potential returns per unit of risk. Ultrapar Participacoes SA is currently generating about -0.12 per unit of volatility. If you would invest 462.00 in Ultrapar Participacoes SA on August 24, 2024 and sell it today you would lose (147.00) from holding Ultrapar Participacoes SA or give up 31.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVR Energy vs. Ultrapar Participacoes SA
Performance |
| Timeline |
| CVR Energy |
| Ultrapar Participacoes |
CVR Energy and Ultrapar Participacoes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVR Energy and Ultrapar Participacoes
The main advantage of trading using opposite CVR Energy and Ultrapar Participacoes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVR Energy position performs unexpectedly, Ultrapar Participacoes 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 Ultrapar Participacoes will offset losses from the drop in Ultrapar Participacoes' 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 |
| Ultrapar Participacoes vs. Star Gas Partners | Ultrapar Participacoes vs. Par Pacific Holdings | Ultrapar Participacoes vs. Delek Energy | Ultrapar Participacoes vs. Crossamerica Partners LP |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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