Correlation Between CVR Energy and Socit Gnrale

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

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

Diversification Opportunities for CVR Energy and Socit Gnrale

-0.67

Correlation Coefficient

CVR Energy  Socit Gnrale

Excellent diversification

The 3 months correlation between CVR and Socit is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding CVR Energy and Socit Gnrale Socit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Socit Gnrale Socit 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 Socit Gnrale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Socit Gnrale Socit has no effect on the direction of CVR Energy i.e., CVR Energy and Socit Gnrale go up and down completely randomly.

Pair Corralation between CVR Energy and Socit Gnrale

Considering the 90-day investment horizon CVR Energy is expected to generate 1.45 times more return on investment than Socit Gnrale. However, CVR Energy is 1.45 times more volatile than Socit Gnrale Socit. It trades about 0.28 of its potential returns per unit of risk. Socit Gnrale Socit is currently generating about -0.21 per unit of risk. If you would invest  1,644  in CVR Energy on September 4, 2024 and sell it today you would earn a total of  324.00  from holding CVR Energy or generate 19.71% return on investment over 90 days.

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

CVR Energy  vs.  Socit Gnrale Socit

CVR Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CVR Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Socit Gnrale Socit

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Socit Gnrale Socit are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, Socit Gnrale reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CVR Energy and Socit Gnrale

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

The idea behind CVR Energy and Socit Gnrale Socit 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.