Correlation Between CVR Energy and TP ICAP

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

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

Diversification Opportunities for CVR Energy and TP ICAP

0.76

Correlation Coefficient

CVR Energy  TP ICAP

Poor diversification

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

Pair Corralation between CVR Energy and TP ICAP

Assuming the 90 days trading horizon CVR Energy is expected to generate 2.03 times more return on investment than TP ICAP. However, CVR Energy is 2.03 times more volatile than TP ICAP Group. It trades about 0.3 of its potential returns per unit of risk. TP ICAP Group is currently generating about 0.27 per unit of risk. If you would invest  1,833  in CVR Energy on April 24, 2025 and sell it today you would earn a total of  987.00  from holding CVR Energy or generate 53.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.16%
Values	Daily Returns

CVR Energy  vs.  TP ICAP Group

CVR Energy

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CVR Energy are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, CVR Energy unveiled solid returns over the last few months and may actually be approaching a breakup point.

TP ICAP Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TP ICAP Group are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, TP ICAP unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CVR Energy and TP ICAP

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

The idea behind CVR Energy and TP ICAP Group 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.