Correlation Between NYSE Composite and CVR Energy
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and CVR Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and CVR Energy, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of CVR Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and CVR Energy.
Diversification Opportunities for NYSE Composite and CVR Energy
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NYSE and CVR is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and CVR Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVR Energy and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and CVR Energy go up and down completely randomly.
Pair Corralation between NYSE Composite and CVR Energy
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.23 times more return on investment than CVR Energy. However, NYSE Composite is 4.32 times less risky than CVR Energy. It trades about 0.11 of its potential returns per unit of risk. CVR Energy is currently generating about -0.04 per unit of risk. If you would invest 1,663,938 in NYSE Composite on November 9, 2024 and sell it today you would earn a total of 351,820 from holding NYSE Composite or generate 21.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. CVR Energy
Performance |
| Timeline |
NYSE Composite and CVR Energy Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
CVR Energy
Pair trading matchups for CVR Energy
Pair Trading with NYSE Composite and CVR Energy
The main advantage of trading using opposite NYSE Composite and CVR Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Integrated Media Technology | NYSE Composite vs. Custom Truck One | NYSE Composite vs. Funko Inc | NYSE Composite vs. Multi Ways Holdings |
| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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