Correlation Between Crossamerica Partners and DCC PLC
Can any of the company-specific risk be diversified away by investing in both Crossamerica Partners and DCC PLC 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 DCC PLC 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 DCC PLC ADR, you can compare the effects of market volatilities on Crossamerica Partners and DCC PLC 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 DCC PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crossamerica Partners and DCC PLC.
Diversification Opportunities for Crossamerica Partners and DCC PLC
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Crossamerica and DCC is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Crossamerica Partners LP and DCC PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DCC PLC 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 DCC PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DCC PLC ADR has no effect on the direction of Crossamerica Partners i.e., Crossamerica Partners and DCC PLC go up and down completely randomly.
Pair Corralation between Crossamerica Partners and DCC PLC
Given the investment horizon of 90 days Crossamerica Partners LP is expected to generate 8.2 times more return on investment than DCC PLC. However, Crossamerica Partners is 8.2 times more volatile than DCC PLC ADR. It trades about 0.07 of its potential returns per unit of risk. DCC PLC ADR is currently generating about 0.09 per unit of risk. If you would invest 1,925 in Crossamerica Partners LP on September 5, 2024 and sell it today you would earn a total of 239.00 from holding Crossamerica Partners LP or generate 12.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crossamerica Partners LP vs. DCC PLC ADR
Performance |
| Timeline |
| Crossamerica Partners |
| DCC PLC ADR |
Crossamerica Partners and DCC PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crossamerica Partners and DCC PLC
The main advantage of trading using opposite Crossamerica Partners and DCC PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crossamerica Partners position performs unexpectedly, DCC PLC 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 DCC PLC will offset losses from the drop in DCC PLC's long position.| Crossamerica Partners vs. CVR Energy | Crossamerica Partners vs. PBF Energy | Crossamerica Partners vs. HF Sinclair Corp | Crossamerica Partners vs. Par Pacific Holdings |
| DCC PLC vs. Ultrapar Participacoes SA | DCC PLC vs. Sunoco LP | DCC PLC vs. HF Sinclair Corp | DCC PLC vs. Delek Energy |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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