Correlation Between CVR Partners and Globalink Investment

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

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

Diversification Opportunities for CVR Partners and Globalink Investment

-0.29

Correlation Coefficient

CVR Partners  Globalink Investment

Very good diversification

The 3 months correlation between CVR and Globalink is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding CVR Partners LP and Globalink Investment Unit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globalink Investment Unit and CVR Partners 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 Partners LP are associated (or correlated) with Globalink Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globalink Investment Unit has no effect on the direction of CVR Partners i.e., CVR Partners and Globalink Investment go up and down completely randomly.

Pair Corralation between CVR Partners and Globalink Investment

Considering the 90-day investment horizon CVR Partners LP is expected to generate 0.72 times more return on investment than Globalink Investment. However, CVR Partners LP is 1.38 times less risky than Globalink Investment. It trades about 0.03 of its potential returns per unit of risk. Globalink Investment Unit is currently generating about 0.01 per unit of risk. If you would invest  7,065  in CVR Partners LP on October 24, 2024 and sell it today you would earn a total of  1,176  from holding CVR Partners LP or generate 16.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.42%
Values	Daily Returns

CVR Partners LP  vs.  Globalink Investment Unit

CVR Partners LP

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CVR Partners LP are ranked lower than 13 (%) 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.

Globalink Investment Unit

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Globalink Investment Unit has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with CVR Partners and Globalink Investment

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

The idea behind CVR Partners LP and Globalink Investment Unit 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.

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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.