Correlation Between CVR Energy and Alfa Financial
Can any of the company-specific risk be diversified away by investing in both CVR Energy and Alfa Financial 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 Alfa Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVR Energy and Alfa Financial Software, you can compare the effects of market volatilities on CVR Energy and Alfa Financial 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 Alfa Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Energy and Alfa Financial.
Diversification Opportunities for CVR Energy and Alfa Financial
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CVR and Alfa is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding CVR Energy and Alfa Financial Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Financial Software 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 Alfa Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Financial Software has no effect on the direction of CVR Energy i.e., CVR Energy and Alfa Financial go up and down completely randomly.
Pair Corralation between CVR Energy and Alfa Financial
Assuming the 90 days trading horizon CVR Energy is expected to generate 2.06 times more return on investment than Alfa Financial. However, CVR Energy is 2.06 times more volatile than Alfa Financial Software. It trades about 0.05 of its potential returns per unit of risk. Alfa Financial Software is currently generating about 0.05 per unit of risk. If you would invest 1,875 in CVR Energy on December 29, 2024 and sell it today you would earn a total of 118.00 from holding CVR Energy or generate 6.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.31% |
Values | Daily Returns |
CVR Energy vs. Alfa Financial Software
Performance |
Timeline |
CVR Energy |
Alfa Financial Software |
CVR Energy and Alfa Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CVR Energy and Alfa Financial
The main advantage of trading using opposite CVR Energy and Alfa Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVR Energy position performs unexpectedly, Alfa Financial 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 Alfa Financial will offset losses from the drop in Alfa Financial's long position.CVR Energy vs. Check Point Software | CVR Energy vs. Take Two Interactive Software | CVR Energy vs. Software Circle plc | CVR Energy vs. mobilezone holding AG |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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