Correlation Between CVR Medical and Strategic Investments

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

By analyzing existing cross correlation between CVR Medical Corp and Strategic Investments AS, you can compare the effects of market volatilities on CVR Medical and Strategic Investments 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 Medical with a short position of Strategic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Medical and Strategic Investments.

Diversification Opportunities for CVR Medical and Strategic Investments

0.0

Correlation Coefficient

CVR Medical  Strategic Investments

Pay attention - limited upside

The 3 months correlation between CVR and Strategic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CVR Medical Corp and Strategic Investments AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Investments and CVR Medical 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 Medical Corp are associated (or correlated) with Strategic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Investments has no effect on the direction of CVR Medical i.e., CVR Medical and Strategic Investments go up and down completely randomly.

Pair Corralation between CVR Medical and Strategic Investments

If you would invest  14.00  in Strategic Investments AS on December 30, 2024 and sell it today you would lose (2.00) from holding Strategic Investments AS or give up 14.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

CVR Medical Corp  vs.  Strategic Investments AS

CVR Medical Corp

Risk-Adjusted Performance

Very Weak

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

Strategic Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Strategic Investments AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Strategic Investments is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with CVR Medical and Strategic Investments

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

The idea behind CVR Medical Corp and Strategic Investments AS 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.