Correlation Between CVR Energy and World Kinect
Can any of the company-specific risk be diversified away by investing in both CVR Energy and World Kinect 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 World Kinect into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVR Energy and World Kinect, you can compare the effects of market volatilities on CVR Energy and World Kinect 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 World Kinect. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Energy and World Kinect.
Diversification Opportunities for CVR Energy and World Kinect
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CVR and World is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding CVR Energy and World Kinect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Kinect 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 World Kinect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Kinect has no effect on the direction of CVR Energy i.e., CVR Energy and World Kinect go up and down completely randomly.
Pair Corralation between CVR Energy and World Kinect
Considering the 90-day investment horizon CVR Energy is expected to generate 2.28 times more return on investment than World Kinect. However, CVR Energy is 2.28 times more volatile than World Kinect. It trades about 0.09 of its potential returns per unit of risk. World Kinect is currently generating about 0.17 per unit of risk. If you would invest 1,878 in CVR Energy on November 2, 2024 and sell it today you would earn a total of 89.00 from holding CVR Energy or generate 4.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVR Energy vs. World Kinect
Performance |
| Timeline |
| CVR Energy |
| World Kinect |
CVR Energy and World Kinect Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVR Energy and World Kinect
The main advantage of trading using opposite CVR Energy and World Kinect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVR Energy position performs unexpectedly, World Kinect 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 World Kinect will offset losses from the drop in World Kinect'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 |
| World Kinect vs. Kenon Holdings | World Kinect vs. Integrated Drilling Equipment | World Kinect vs. Nabors Industries | World Kinect vs. AKITA Drilling |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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