Correlation Between Crossamerica Partners and Ardmore Shpng
Can any of the company-specific risk be diversified away by investing in both Crossamerica Partners and Ardmore Shpng 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 Ardmore Shpng 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 Ardmore Shpng, you can compare the effects of market volatilities on Crossamerica Partners and Ardmore Shpng 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 Ardmore Shpng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crossamerica Partners and Ardmore Shpng.
Diversification Opportunities for Crossamerica Partners and Ardmore Shpng
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Crossamerica and Ardmore is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Crossamerica Partners LP and Ardmore Shpng in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardmore Shpng 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 Ardmore Shpng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ardmore Shpng has no effect on the direction of Crossamerica Partners i.e., Crossamerica Partners and Ardmore Shpng go up and down completely randomly.
Pair Corralation between Crossamerica Partners and Ardmore Shpng
Given the investment horizon of 90 days Crossamerica Partners LP is expected to generate 0.58 times more return on investment than Ardmore Shpng. However, Crossamerica Partners LP is 1.74 times less risky than Ardmore Shpng. It trades about 0.08 of its potential returns per unit of risk. Ardmore Shpng is currently generating about -0.16 per unit of risk. If you would invest 1,901 in Crossamerica Partners LP on January 15, 2025 and sell it today you would earn a total of 345.00 from holding Crossamerica Partners LP or generate 18.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crossamerica Partners LP vs. Ardmore Shpng
Performance |
| Timeline |
| Crossamerica Partners |
| Ardmore Shpng |
Crossamerica Partners and Ardmore Shpng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crossamerica Partners and Ardmore Shpng
The main advantage of trading using opposite Crossamerica Partners and Ardmore Shpng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crossamerica Partners position performs unexpectedly, Ardmore Shpng 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 Ardmore Shpng will offset losses from the drop in Ardmore Shpng's long position.| Crossamerica Partners vs. Delek Energy | Crossamerica Partners vs. Sunoco LP | Crossamerica Partners vs. CVR Energy | Crossamerica Partners vs. Phillips 66 |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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