Correlation Between Crossamerica Partners and Adams Resources
Can any of the company-specific risk be diversified away by investing in both Crossamerica Partners and Adams 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 Crossamerica Partners and Adams Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crossamerica Partners LP and Adams Resources Energy, you can compare the effects of market volatilities on Crossamerica Partners and Adams 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 Crossamerica Partners with a short position of Adams Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crossamerica Partners and Adams Resources.
Diversification Opportunities for Crossamerica Partners and Adams Resources
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Crossamerica and Adams is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Crossamerica Partners LP and Adams Resources Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adams Resources Energy and Crossamerica 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 Crossamerica Partners LP are associated (or correlated) with Adams Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adams Resources Energy has no effect on the direction of Crossamerica Partners i.e., Crossamerica Partners and Adams Resources go up and down completely randomly.
Pair Corralation between Crossamerica Partners and Adams Resources
Given the investment horizon of 90 days Crossamerica Partners is expected to generate 5.63 times less return on investment than Adams Resources. But when comparing it to its historical volatility, Crossamerica Partners LP is 3.51 times less risky than Adams Resources. It trades about 0.11 of its potential returns per unit of risk. Adams Resources Energy is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,368 in Adams Resources Energy on August 31, 2024 and sell it today you would earn a total of 1,356 from holding Adams Resources Energy or generate 57.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crossamerica Partners LP vs. Adams Resources Energy
Performance |
| Timeline |
| Crossamerica Partners |
| Adams Resources Energy |
Crossamerica Partners and Adams Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crossamerica Partners and Adams Resources
The main advantage of trading using opposite Crossamerica Partners and Adams Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crossamerica Partners position performs unexpectedly, Adams 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 Adams Resources will offset losses from the drop in Adams Resources' long position.| Crossamerica Partners vs. Delek Energy | Crossamerica Partners vs. Sunoco LP | Crossamerica Partners vs. CVR Energy | Crossamerica Partners vs. Phillips 66 |
| Adams Resources vs. PrimeEnergy | Adams Resources vs. Barnwell Industries | Adams Resources vs. Acme United | Adams Resources vs. CKX Lands |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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