Correlation Between Crossamerica Partners and Clean Energy
Can any of the company-specific risk be diversified away by investing in both Crossamerica Partners and Clean Energy 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 Clean Energy 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 Clean Energy Fuels, you can compare the effects of market volatilities on Crossamerica Partners and Clean Energy 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 Clean Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crossamerica Partners and Clean Energy.
Diversification Opportunities for Crossamerica Partners and Clean Energy
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Crossamerica and Clean is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Crossamerica Partners LP and Clean Energy Fuels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Energy Fuels 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 Clean Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Energy Fuels has no effect on the direction of Crossamerica Partners i.e., Crossamerica Partners and Clean Energy go up and down completely randomly.
Pair Corralation between Crossamerica Partners and Clean Energy
Given the investment horizon of 90 days Crossamerica Partners LP is expected to under-perform the Clean Energy. But the stock apears to be less risky and, when comparing its historical volatility, Crossamerica Partners LP is 2.64 times less risky than Clean Energy. The stock trades about 0.0 of its potential returns per unit of risk. The Clean Energy Fuels is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 283.00 in Clean Energy Fuels on September 2, 2024 and sell it today you would earn a total of 25.00 from holding Clean Energy Fuels or generate 8.83% 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. Clean Energy Fuels
Performance |
| Timeline |
| Crossamerica Partners |
| Clean Energy Fuels |
Crossamerica Partners and Clean Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crossamerica Partners and Clean Energy
The main advantage of trading using opposite Crossamerica Partners and Clean Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crossamerica Partners position performs unexpectedly, Clean Energy 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 Clean Energy will offset losses from the drop in Clean Energy's long position.| Crossamerica Partners vs. Delek Energy | Crossamerica Partners vs. Sunoco LP | Crossamerica Partners vs. CVR Energy | Crossamerica Partners vs. Phillips 66 |
| Clean Energy vs. Vertex Energy | Clean Energy vs. Icahn Enterprises LP | Clean Energy vs. PBF Energy | Clean Energy vs. Delek Logistics Partners |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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