Correlation Between Delek Energy and CVR Energy

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

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

Diversification Opportunities for Delek Energy and CVR Energy

0.97

Correlation Coefficient

Delek Energy  CVR Energy

Almost no diversification

The 3 months correlation between Delek and CVR is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Delek Energy and CVR Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVR Energy and Delek 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 Delek Energy 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 Delek Energy i.e., Delek Energy and CVR Energy go up and down completely randomly.

Pair Corralation between Delek Energy and CVR Energy

Allowing for the 90-day total investment horizon Delek Energy is expected to generate 1.28 times more return on investment than CVR Energy. However, Delek Energy is 1.28 times more volatile than CVR Energy. It trades about 0.2 of its potential returns per unit of risk. CVR Energy is currently generating about 0.11 per unit of risk. If you would invest  1,380  in Delek Energy on May 6, 2025 and sell it today you would earn a total of  697.00  from holding Delek Energy or generate 50.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Delek Energy  vs.  CVR Energy

Delek Energy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Delek Energy are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Delek Energy disclosed 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 unfluctuating basic indicators, CVR Energy demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Delek Energy and CVR Energy

The main advantage of trading using opposite Delek Energy and CVR Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delek Energy 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 Delek Energy 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.