Correlation Between CVR Partners and INSYS Therapeutics

Can any of the company-specific risk be diversified away by investing in both CVR Partners and INSYS Therapeutics 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 INSYS Therapeutics 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 INSYS Therapeutics, you can compare the effects of market volatilities on CVR Partners and INSYS Therapeutics 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 INSYS Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Partners and INSYS Therapeutics.

Diversification Opportunities for CVR Partners and INSYS Therapeutics

0.0

Correlation Coefficient

CVR Partners  INSYS Therapeutics

Pay attention - limited upside

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

Pair Corralation between CVR Partners and INSYS Therapeutics

If you would invest  8,065  in CVR Partners LP on February 5, 2024 and sell it today you would earn a total of  10.00  from holding CVR Partners LP or generate 0.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

CVR Partners LP  vs.  INSYS Therapeutics

CVR Partners LP

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CVR Partners LP are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, CVR Partners displayed solid returns over the last few months and may actually be approaching a breakup point.

INSYS Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INSYS Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, INSYS Therapeutics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CVR Partners and INSYS Therapeutics

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

The idea behind CVR Partners LP and INSYS Therapeutics 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.