Correlation Between Adams Resources and Ultrapar Participacoes
Can any of the company-specific risk be diversified away by investing in both Adams Resources and Ultrapar Participacoes 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 Adams Resources and Ultrapar Participacoes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adams Resources Energy and Ultrapar Participacoes SA, you can compare the effects of market volatilities on Adams Resources and Ultrapar Participacoes 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 Adams Resources with a short position of Ultrapar Participacoes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adams Resources and Ultrapar Participacoes.
Diversification Opportunities for Adams Resources and Ultrapar Participacoes
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Adams and Ultrapar is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Adams Resources Energy and Ultrapar Participacoes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultrapar Participacoes and Adams Resources 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 Adams Resources Energy are associated (or correlated) with Ultrapar Participacoes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultrapar Participacoes has no effect on the direction of Adams Resources i.e., Adams Resources and Ultrapar Participacoes go up and down completely randomly.
Pair Corralation between Adams Resources and Ultrapar Participacoes
Allowing for the 90-day total investment horizon Adams Resources Energy is expected to generate 1.62 times more return on investment than Ultrapar Participacoes. However, Adams Resources is 1.62 times more volatile than Ultrapar Participacoes SA. It trades about 0.13 of its potential returns per unit of risk. Ultrapar Participacoes SA is currently generating about -0.12 per unit of risk. If you would invest 2,812 in Adams Resources Energy on November 8, 2024 and sell it today you would earn a total of 986.00 from holding Adams Resources Energy or generate 35.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.67% |
| Values | Daily Returns |
Adams Resources Energy vs. Ultrapar Participacoes SA
Performance |
| Timeline |
| Adams Resources Energy |
| Ultrapar Participacoes |
Adams Resources and Ultrapar Participacoes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adams Resources and Ultrapar Participacoes
The main advantage of trading using opposite Adams Resources and Ultrapar Participacoes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adams Resources position performs unexpectedly, Ultrapar Participacoes 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 Ultrapar Participacoes will offset losses from the drop in Ultrapar Participacoes' long position.| Adams Resources vs. PrimeEnergy | Adams Resources vs. Barnwell Industries | Adams Resources vs. Acme United | Adams Resources vs. CKX Lands |
| Ultrapar Participacoes vs. Star Gas Partners | Ultrapar Participacoes vs. Par Pacific Holdings | Ultrapar Participacoes vs. Delek Energy | Ultrapar Participacoes vs. Crossamerica Partners LP |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Stocks Directory Find actively traded stocks across global markets | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |