Correlation Between CVR Energy and California Resources
Can any of the company-specific risk be diversified away by investing in both CVR Energy and California Resources 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 California Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVR Energy and California Resources Corp, you can compare the effects of market volatilities on CVR Energy and California Resources 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 California Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Energy and California Resources.
Diversification Opportunities for CVR Energy and California Resources
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CVR and California is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding CVR Energy and California Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Resources Corp 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 California Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Resources Corp has no effect on the direction of CVR Energy i.e., CVR Energy and California Resources go up and down completely randomly.
Pair Corralation between CVR Energy and California Resources
Considering the 90-day investment horizon CVR Energy is expected to generate 1.33 times more return on investment than California Resources. However, CVR Energy is 1.33 times more volatile than California Resources Corp. It trades about 0.06 of its potential returns per unit of risk. California Resources Corp is currently generating about 0.0 per unit of risk. If you would invest 2,229 in CVR Energy on August 29, 2025 and sell it today you would earn a total of 1,212 from holding CVR Energy or generate 54.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVR Energy vs. California Resources Corp
Performance |
| Timeline |
| CVR Energy |
| California Resources Corp |
CVR Energy and California Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVR Energy and California Resources
The main advantage of trading using opposite CVR Energy and California Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVR Energy position performs unexpectedly, California Resources 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 California Resources will offset losses from the drop in California Resources' long position.| CVR Energy vs. Plaza Retail REIT | CVR Energy vs. Tencent Music Entertainment | CVR Energy vs. Renewable Energy Trade | CVR Energy vs. Live Nation Entertainment |
| California Resources vs. Prosperity Real Estate | California Resources vs. AG Mortgage Investment | California Resources vs. Datatec Limited | California Resources vs. Public Storage DEP |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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