Correlation Between Crossamerica Partners and Cosan SA
Can any of the company-specific risk be diversified away by investing in both Crossamerica Partners and Cosan SA 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 Cosan SA 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 Cosan SA ADR, you can compare the effects of market volatilities on Crossamerica Partners and Cosan SA 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 Cosan SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crossamerica Partners and Cosan SA.
Diversification Opportunities for Crossamerica Partners and Cosan SA
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Crossamerica and Cosan is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Crossamerica Partners LP and Cosan SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosan SA ADR 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 Cosan SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cosan SA ADR has no effect on the direction of Crossamerica Partners i.e., Crossamerica Partners and Cosan SA go up and down completely randomly.
Pair Corralation between Crossamerica Partners and Cosan SA
Given the investment horizon of 90 days Crossamerica Partners LP is expected to generate 0.33 times more return on investment than Cosan SA. However, Crossamerica Partners LP is 3.0 times less risky than Cosan SA. It trades about 0.16 of its potential returns per unit of risk. Cosan SA ADR is currently generating about -0.04 per unit of risk. If you would invest 2,153 in Crossamerica Partners LP on November 8, 2024 and sell it today you would earn a total of 86.00 from holding Crossamerica Partners LP or generate 3.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crossamerica Partners LP vs. Cosan SA ADR
Performance |
| Timeline |
| Crossamerica Partners |
| Cosan SA ADR |
Crossamerica Partners and Cosan SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crossamerica Partners and Cosan SA
The main advantage of trading using opposite Crossamerica Partners and Cosan SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crossamerica Partners position performs unexpectedly, Cosan SA 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 Cosan SA will offset losses from the drop in Cosan SA's long position.| Crossamerica Partners vs. Delek Energy | Crossamerica Partners vs. Sunoco LP | Crossamerica Partners vs. CVR Energy | Crossamerica Partners vs. Phillips 66 |
| Cosan SA vs. Delek Energy | Cosan SA vs. Crossamerica Partners LP | Cosan SA vs. Par Pacific Holdings | Cosan SA vs. Valvoline |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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