Correlation Between CVR Energy and Shell PLC
Can any of the company-specific risk be diversified away by investing in both CVR Energy and Shell PLC 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 Shell PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVR Energy and Shell PLC, you can compare the effects of market volatilities on CVR Energy and Shell PLC 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 Shell PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Energy and Shell PLC.
Diversification Opportunities for CVR Energy and Shell PLC
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CVR and Shell is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding CVR Energy and Shell PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shell PLC 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 Shell PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shell PLC has no effect on the direction of CVR Energy i.e., CVR Energy and Shell PLC go up and down completely randomly.
Pair Corralation between CVR Energy and Shell PLC
Considering the 90-day investment horizon CVR Energy is expected to generate 1.04 times more return on investment than Shell PLC. However, CVR Energy is 1.04 times more volatile than Shell PLC. It trades about 0.29 of its potential returns per unit of risk. Shell PLC is currently generating about 0.07 per unit of risk. If you would invest 1,636 in CVR Energy on April 24, 2025 and sell it today you would earn a total of 1,181 from holding CVR Energy or generate 72.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
CVR Energy vs. Shell PLC
Performance |
Timeline |
CVR Energy |
Shell PLC |
CVR Energy and Shell PLC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CVR Energy and Shell PLC
The main advantage of trading using opposite CVR Energy and Shell PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVR Energy position performs unexpectedly, Shell PLC 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 Shell PLC will offset losses from the drop in Shell PLC's long position.CVR Energy vs. Delek Logistics Partners | CVR Energy vs. PBF Energy | CVR Energy vs. HF Sinclair Corp | CVR Energy vs. Par Pacific Holdings |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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