Correlation Between Aemetis and CVR Energy

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

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

Diversification Opportunities for Aemetis and CVR Energy

0.89

Correlation Coefficient

Aemetis  CVR Energy

Very poor diversification

The 3 months correlation between Aemetis and CVR is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Aemetis and CVR Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVR Energy and Aemetis 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 Aemetis 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 Aemetis i.e., Aemetis and CVR Energy go up and down completely randomly.

Pair Corralation between Aemetis and CVR Energy

Given the investment horizon of 90 days Aemetis is expected to generate 1.92 times more return on investment than CVR Energy. However, Aemetis is 1.92 times more volatile than CVR Energy. It trades about 0.25 of its potential returns per unit of risk. CVR Energy is currently generating about 0.12 per unit of risk. If you would invest  125.00  in Aemetis on May 6, 2025 and sell it today you would earn a total of  146.00  from holding Aemetis or generate 116.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.41%
Values	Daily Returns

Aemetis  vs.  CVR Energy

Aemetis

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aemetis are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Aemetis showed solid returns over the last few months and may actually be approaching a breakup point.

CVR Energy

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CVR Energy are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting basic indicators, CVR Energy demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aemetis and CVR Energy

The main advantage of trading using opposite Aemetis and CVR Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aemetis 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 Aemetis 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.