Correlation Between Empire Petroleum and CVR Energy
Can any of the company-specific risk be diversified away by investing in both Empire Petroleum and CVR 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 Empire Petroleum and CVR Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire Petroleum Corp and CVR Energy, you can compare the effects of market volatilities on Empire Petroleum and CVR 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 Empire Petroleum with a short position of CVR Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire Petroleum and CVR Energy.
Diversification Opportunities for Empire Petroleum and CVR Energy
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Empire and CVR is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Empire Petroleum Corp and CVR Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVR Energy and Empire Petroleum 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 Empire Petroleum Corp are associated (or correlated) with CVR Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVR Energy has no effect on the direction of Empire Petroleum i.e., Empire Petroleum and CVR Energy go up and down completely randomly.
Pair Corralation between Empire Petroleum and CVR Energy
Allowing for the 90-day total investment horizon Empire Petroleum Corp is expected to under-perform the CVR Energy. In addition to that, Empire Petroleum is 1.51 times more volatile than CVR Energy. It trades about -0.02 of its total potential returns per unit of risk. CVR Energy is currently generating about -0.01 per unit of volatility. If you would invest 2,736 in CVR Energy on August 24, 2024 and sell it today you would lose (862.00) from holding CVR Energy or give up 31.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Empire Petroleum Corp vs. CVR Energy
Performance |
| Timeline |
| Empire Petroleum Corp |
| CVR Energy |
Empire Petroleum and CVR Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire Petroleum and CVR Energy
The main advantage of trading using opposite Empire Petroleum and CVR Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire Petroleum position performs unexpectedly, CVR 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 CVR Energy will offset losses from the drop in CVR Energy's long position.| Empire Petroleum vs. PHX Minerals | Empire Petroleum vs. Mexco Energy | Empire Petroleum vs. Granite Ridge Resources | Empire Petroleum vs. XXL Energy Corp |
| CVR Energy vs. Delek Logistics Partners | CVR Energy vs. PBF Energy | CVR Energy vs. HF Sinclair Corp | CVR Energy vs. Par Pacific Holdings |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |