Correlation Between CVR Energy and Amedeo Air

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

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

Diversification Opportunities for CVR Energy and Amedeo Air

-0.54

Correlation Coefficient

CVR Energy  Amedeo Air

Excellent diversification

The 3 months correlation between CVR and Amedeo is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding CVR Energy and Amedeo Air Four in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amedeo Air Four 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 Amedeo Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amedeo Air Four has no effect on the direction of CVR Energy i.e., CVR Energy and Amedeo Air go up and down completely randomly.

Pair Corralation between CVR Energy and Amedeo Air

Assuming the 90 days trading horizon CVR Energy is expected to under-perform the Amedeo Air. In addition to that, CVR Energy is 8.33 times more volatile than Amedeo Air Four. It trades about -0.09 of its total potential returns per unit of risk. Amedeo Air Four is currently generating about 0.52 per unit of volatility. If you would invest  4,950  in Amedeo Air Four on September 27, 2024 and sell it today you would earn a total of  750.00  from holding Amedeo Air Four or generate 15.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.67%
Values	Daily Returns

CVR Energy  vs.  Amedeo Air Four

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.

Amedeo Air Four

Risk-Adjusted Performance

29 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Amedeo Air Four are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Amedeo Air exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CVR Energy and Amedeo Air

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

The idea behind CVR Energy and Amedeo Air Four 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 CEOs Directory module to screen CEOs from public companies around the world.