Correlation Between CVR Partners and Citrix Systems

Can any of the company-specific risk be diversified away by investing in both CVR Partners and Citrix Systems 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 Partners and Citrix Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CVR Partners LP and Citrix Systems, you can compare the effects of market volatilities on CVR Partners and Citrix Systems 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 Partners with a short position of Citrix Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Partners and Citrix Systems.

Diversification Opportunities for CVR Partners and Citrix Systems

0.82

Correlation Coefficient

CVR Partners  Citrix Systems

Very poor diversification

The 3 months correlation between CVR and Citrix is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding CVR Partners LP and Citrix Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citrix Systems and CVR Partners 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 Partners LP are associated (or correlated) with Citrix Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citrix Systems has no effect on the direction of CVR Partners i.e., CVR Partners and Citrix Systems go up and down completely randomly.

Pair Corralation between CVR Partners and Citrix Systems

If you would invest  6,377  in CVR Partners LP on March 8, 2024 and sell it today you would earn a total of  1,658  from holding CVR Partners LP or generate 26.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	1.61%
Values	Daily Returns

CVR Partners LP  vs.  Citrix Systems

CVR Partners LP

Risk-Adjusted Performance

11 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CVR Partners LP are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, CVR Partners displayed solid returns over the last few months and may actually be approaching a breakup point.

Citrix Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Citrix Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Citrix Systems is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with CVR Partners and Citrix Systems

The main advantage of trading using opposite CVR Partners and Citrix Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVR Partners position performs unexpectedly, Citrix Systems 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 Citrix Systems will offset losses from the drop in Citrix Systems' long position.

The idea behind CVR Partners LP and Citrix Systems 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.