Correlation Between Lsb Industries and CVR Partners

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

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

Diversification Opportunities for Lsb Industries and CVR Partners

0.76

Correlation Coefficient

Lsb Industries  CVR Partners

Poor diversification

The 3 months correlation between Lsb and CVR is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Lsb Industries and CVR Partners LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVR Partners LP and Lsb Industries 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 Lsb Industries are associated (or correlated) with CVR Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVR Partners LP has no effect on the direction of Lsb Industries i.e., Lsb Industries and CVR Partners go up and down completely randomly.

Pair Corralation between Lsb Industries and CVR Partners

Considering the 90-day investment horizon Lsb Industries is expected to generate 1.16 times less return on investment than CVR Partners. In addition to that, Lsb Industries is 2.2 times more volatile than CVR Partners LP. It trades about 0.11 of its total potential returns per unit of risk. CVR Partners LP is currently generating about 0.27 per unit of volatility. If you would invest  7,934  in CVR Partners LP on May 6, 2025 and sell it today you would earn a total of  1,782  from holding CVR Partners LP or generate 22.46% return on investment over 90 days.

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

Lsb Industries  vs.  CVR Partners LP

Lsb Industries

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lsb Industries are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Lsb Industries unveiled solid returns over the last few months and may actually be approaching a breakup point.

CVR Partners LP

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CVR Partners LP are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, CVR Partners displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lsb Industries and CVR Partners

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

The idea behind Lsb Industries and CVR Partners LP 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.