Correlation Between GreenX Metals and CVR Energy

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

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

Diversification Opportunities for GreenX Metals and CVR Energy

0.41

Correlation Coefficient

GreenX Metals  CVR Energy

Very weak diversification

The 3 months correlation between GreenX and CVR is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding GreenX Metals and CVR Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVR Energy and GreenX Metals 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 GreenX Metals are associated (or correlated) with CVR Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVR Energy has no effect on the direction of GreenX Metals i.e., GreenX Metals and CVR Energy go up and down completely randomly.

Pair Corralation between GreenX Metals and CVR Energy

Assuming the 90 days trading horizon GreenX Metals is expected to generate 0.58 times more return on investment than CVR Energy. However, GreenX Metals is 1.72 times less risky than CVR Energy. It trades about 0.07 of its potential returns per unit of risk. CVR Energy is currently generating about -0.01 per unit of risk. If you would invest  3,550  in GreenX Metals on December 2, 2024 and sell it today you would earn a total of  250.00  from holding GreenX Metals or generate 7.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

GreenX Metals  vs.  CVR Energy

GreenX Metals

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GreenX Metals are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, GreenX Metals may actually be approaching a critical reversion point that can send shares even higher in April 2025.

CVR Energy

Risk-Adjusted Performance

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 comparatively stable basic indicators, CVR Energy is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with GreenX Metals and CVR Energy

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

The idea behind GreenX Metals and CVR Energy 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.