Correlation Between CVR Energy and Alstria Office

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

By analyzing existing cross correlation between CVR Energy and alstria office REIT AG, you can compare the effects of market volatilities on CVR Energy and Alstria Office 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 Alstria Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Energy and Alstria Office.

Diversification Opportunities for CVR Energy and Alstria Office

-0.84

Correlation Coefficient

CVR Energy  Alstria Office

Pay attention - limited upside

The 3 months correlation between CVR and Alstria is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding CVR Energy and alstria office REIT AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on alstria office REIT 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 Alstria Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of alstria office REIT has no effect on the direction of CVR Energy i.e., CVR Energy and Alstria Office go up and down completely randomly.

Pair Corralation between CVR Energy and Alstria Office

Assuming the 90 days trading horizon CVR Energy is expected to under-perform the Alstria Office. But the stock apears to be less risky and, when comparing its historical volatility, CVR Energy is 1.41 times less risky than Alstria Office. The stock trades about -0.07 of its potential returns per unit of risk. The alstria office REIT AG is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  342.00  in alstria office REIT AG on September 25, 2024 and sell it today you would earn a total of  425.00  from holding alstria office REIT AG or generate 124.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	97.64%
Values	Daily Returns

CVR Energy  vs.  alstria office REIT AG

CVR Energy

Risk-Adjusted Performance

0 of 100

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

alstria office REIT

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in alstria office REIT AG are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain essential indicators, Alstria Office disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CVR Energy and Alstria Office

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

The idea behind CVR Energy and alstria office REIT AG 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.