Correlation Between CVR Partners and Contextlogic

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

Diversification Opportunities for CVR Partners and Contextlogic

0.47

Correlation Coefficient

CVR Partners  Contextlogic

Very weak diversification

The 3 months correlation between CVR and Contextlogic is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding CVR Partners LP and Contextlogic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contextlogic 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 Contextlogic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contextlogic has no effect on the direction of CVR Partners i.e., CVR Partners and Contextlogic go up and down completely randomly.

Pair Corralation between CVR Partners and Contextlogic

Considering the 90-day investment horizon CVR Partners LP is expected to generate 0.3 times more return on investment than Contextlogic. However, CVR Partners LP is 3.3 times less risky than Contextlogic. It trades about 0.26 of its potential returns per unit of risk. Contextlogic is currently generating about 0.06 per unit of risk. If you would invest  7,781  in CVR Partners LP on May 3, 2025 and sell it today you would earn a total of  1,692  from holding CVR Partners LP or generate 21.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	55.74%
Values	Daily Returns

CVR Partners LP  vs.  Contextlogic

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 20 (%) 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.

Contextlogic

Risk-Adjusted Performance

Modest

Over the last 90 days Contextlogic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather weak technical and fundamental indicators, Contextlogic exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CVR Partners and Contextlogic

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

The idea behind CVR Partners LP and Contextlogic 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.