Correlation Between CVR Refining and ProShares UltraShort

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Can any of the company-specific risk be diversified away by investing in both CVR Refining and ProShares UltraShort 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 Refining and ProShares UltraShort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVR Refining LP and ProShares UltraShort Bloomberg, you can compare the effects of market volatilities on CVR Refining and ProShares UltraShort 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 Refining with a short position of ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Refining and ProShares UltraShort.

Diversification Opportunities for CVR Refining and ProShares UltraShort

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between CVR and ProShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CVR Refining LP and ProShares UltraShort Bloomberg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort and CVR Refining 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 Refining LP are associated (or correlated) with ProShares UltraShort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraShort has no effect on the direction of CVR Refining i.e., CVR Refining and ProShares UltraShort go up and down completely randomly.

Pair Corralation between CVR Refining and ProShares UltraShort

If you would invest (100.00) in CVR Refining LP on December 30, 2023 and sell it today you would earn a total of  100.00  from holding CVR Refining LP or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

CVR Refining LP  vs.  ProShares UltraShort Bloomberg

 Performance 
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CVR Refining LP 

Risk-Adjusted Performance

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Over the last 90 days CVR Refining LP has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, CVR Refining is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.
ProShares UltraShort 

Risk-Adjusted Performance

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Over the last 90 days ProShares UltraShort Bloomberg has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Etf's fundamental indicators remain very healthy which may send shares a bit higher in April 2024. The recent disarray may also be a sign of long period up-swing for the ETF investors.

CVR Refining and ProShares UltraShort Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CVR Refining and ProShares UltraShort

The main advantage of trading using opposite CVR Refining and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVR Refining position performs unexpectedly, ProShares UltraShort 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 ProShares UltraShort will offset losses from the drop in ProShares UltraShort's long position.
The idea behind CVR Refining LP and ProShares UltraShort Bloomberg pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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