Correlation Between CVR Energy and Surgical Science

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

By analyzing existing cross correlation between CVR Energy and Surgical Science Sweden, you can compare the effects of market volatilities on CVR Energy and Surgical Science 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 Surgical Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Energy and Surgical Science.

Diversification Opportunities for CVR Energy and Surgical Science

0.33

Correlation Coefficient

CVR Energy  Surgical Science

Weak diversification

The 3 months correlation between CVR and Surgical is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding CVR Energy and Surgical Science Sweden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surgical Science Sweden 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 Surgical Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surgical Science Sweden has no effect on the direction of CVR Energy i.e., CVR Energy and Surgical Science go up and down completely randomly.

Pair Corralation between CVR Energy and Surgical Science

Assuming the 90 days trading horizon CVR Energy is expected to generate 0.74 times more return on investment than Surgical Science. However, CVR Energy is 1.36 times less risky than Surgical Science. It trades about -0.05 of its potential returns per unit of risk. Surgical Science Sweden is currently generating about -0.14 per unit of risk. If you would invest  1,921  in CVR Energy on December 1, 2024 and sell it today you would lose (71.00) from holding CVR Energy or give up 3.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	91.3%
Values	Daily Returns

CVR Energy  vs.  Surgical Science Sweden

CVR Energy

Risk-Adjusted Performance

Very Weak

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

Surgical Science Sweden

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Surgical Science Sweden are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Surgical Science may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with CVR Energy and Surgical Science

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

The idea behind CVR Energy and Surgical Science Sweden 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.

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 Money Managers module to screen money managers from public funds and ETFs managed around the world.