Correlation Between CVR Energy and Exxon
Can any of the company-specific risk be diversified away by investing in both CVR Energy and Exxon 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 Energy and Exxon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVR Energy and Exxon Mobil Corp, you can compare the effects of market volatilities on CVR Energy and Exxon 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 Energy with a short position of Exxon. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Energy and Exxon.
Diversification Opportunities for CVR Energy and Exxon
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CVR and Exxon is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding CVR Energy and Exxon Mobil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exxon Mobil Corp and CVR Energy 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 Energy are associated (or correlated) with Exxon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exxon Mobil Corp has no effect on the direction of CVR Energy i.e., CVR Energy and Exxon go up and down completely randomly.
Pair Corralation between CVR Energy and Exxon
Considering the 90-day investment horizon CVR Energy is expected to generate 1.71 times more return on investment than Exxon. However, CVR Energy is 1.71 times more volatile than Exxon Mobil Corp. It trades about 0.04 of its potential returns per unit of risk. Exxon Mobil Corp is currently generating about 0.05 per unit of risk. If you would invest 2,420 in CVR Energy on January 24, 2024 and sell it today you would earn a total of 890.00 from holding CVR Energy or generate 36.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 99.8% |
Values | Daily Returns |
CVR Energy vs. Exxon Mobil Corp
Performance |
Timeline |
CVR Energy |
Exxon Mobil Corp |
CVR Energy and Exxon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CVR Energy and Exxon
The main advantage of trading using opposite CVR Energy and Exxon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVR Energy position performs unexpectedly, Exxon 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 Exxon will offset losses from the drop in Exxon's long position.CVR Energy vs. Delek Logistics Partners | CVR Energy vs. Crossamerica Partners LP | CVR Energy vs. Sunoco LP |
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 Stocks Directory module to find actively traded stocks across global markets.
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