Correlation Between Star Gas and CVR Energy
Can any of the company-specific risk be diversified away by investing in both Star Gas 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 Star Gas and CVR Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Star Gas Partners and CVR Energy, you can compare the effects of market volatilities on Star Gas 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 Star Gas with a short position of CVR Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Gas and CVR Energy.
Diversification Opportunities for Star Gas and CVR Energy
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Star and CVR is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Star Gas Partners and CVR Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVR Energy and Star Gas 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 Star Gas Partners 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 Star Gas i.e., Star Gas and CVR Energy go up and down completely randomly.
Pair Corralation between Star Gas and CVR Energy
Considering the 90-day investment horizon Star Gas Partners is expected to generate 0.33 times more return on investment than CVR Energy. However, Star Gas Partners is 3.03 times less risky than CVR Energy. It trades about 0.24 of its potential returns per unit of risk. CVR Energy is currently generating about -0.14 per unit of risk. If you would invest 1,138 in Star Gas Partners on August 27, 2024 and sell it today you would earn a total of 123.00 from holding Star Gas Partners or generate 10.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Star Gas Partners vs. CVR Energy
Performance |
| Timeline |
| Star Gas Partners |
| CVR Energy |
Star Gas and CVR Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Star Gas and CVR Energy
The main advantage of trading using opposite Star Gas and CVR Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Gas 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.| Star Gas vs. Ultrapar Participacoes SA | Star Gas vs. Par Pacific Holdings | Star Gas vs. Delek Energy | Star Gas vs. Crossamerica Partners LP |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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