Correlation Between CVR Energy and Valero Energy
Can any of the company-specific risk be diversified away by investing in both CVR Energy and Valero Energy 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 Valero Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVR Energy and Valero Energy, you can compare the effects of market volatilities on CVR Energy and Valero Energy 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 Valero Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Energy and Valero Energy.
Diversification Opportunities for CVR Energy and Valero Energy
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CVR and Valero is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding CVR Energy and Valero Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valero Energy 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 Valero Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valero Energy has no effect on the direction of CVR Energy i.e., CVR Energy and Valero Energy go up and down completely randomly.
Pair Corralation between CVR Energy and Valero Energy
Considering the 90-day investment horizon CVR Energy is expected to under-perform the Valero Energy. In addition to that, CVR Energy is 3.61 times more volatile than Valero Energy. It trades about -0.15 of its total potential returns per unit of risk. Valero Energy is currently generating about 0.12 per unit of volatility. If you would invest 13,469 in Valero Energy on August 23, 2024 and sell it today you would earn a total of 642.00 from holding Valero Energy or generate 4.77% 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. Valero Energy
Performance |
| Timeline |
| CVR Energy |
| Valero Energy |
CVR Energy and Valero Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVR Energy and Valero Energy
The main advantage of trading using opposite CVR Energy and Valero Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVR Energy position performs unexpectedly, Valero Energy 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 Valero Energy will offset losses from the drop in Valero Energy'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 |
| Valero Energy vs. Phillips 66 | Valero Energy vs. HF Sinclair Corp | Valero Energy vs. PBF Energy | Valero Energy vs. CVR Energy |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |