Correlation Between Quad Energy and CVR Partners

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

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

Diversification Opportunities for Quad Energy and CVR Partners

0.0

Correlation Coefficient

Quad Energy  CVR Partners

Pay attention - limited upside

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

Pair Corralation between Quad Energy and CVR Partners

If you would invest  6,904  in CVR Partners LP on October 9, 2024 and sell it today you would earn a total of  710.00  from holding CVR Partners LP or generate 10.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Quad Energy Corp  vs.  CVR Partners LP

Quad Energy Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quad Energy Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, Quad Energy is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

CVR Partners LP

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CVR Partners LP are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, CVR Partners displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Quad Energy and CVR Partners

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

The idea behind Quad Energy Corp and CVR Partners LP 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.