Correlation Between Crossamerica Partners and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Crossamerica Partners and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Crossamerica Partners and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crossamerica Partners and Dow Jones.
Diversification Opportunities for Crossamerica Partners and Dow Jones
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Crossamerica and Dow is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Crossamerica Partners LP and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Crossamerica Partners i.e., Crossamerica Partners and Dow Jones go up and down completely randomly.
Pair Corralation between Crossamerica Partners and Dow Jones
Given the investment horizon of 90 days Crossamerica Partners LP is expected to generate 2.1 times more return on investment than Dow Jones. However, Crossamerica Partners is 2.1 times more volatile than Dow Jones Industrial. It trades about 0.04 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 1,593 in Crossamerica Partners LP on August 24, 2024 and sell it today you would earn a total of 429.00 from holding Crossamerica Partners LP or generate 26.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crossamerica Partners LP vs. Dow Jones Industrial
Performance |
| Timeline |
Crossamerica Partners and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Crossamerica Partners LP
Pair trading matchups for Crossamerica Partners
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Crossamerica Partners and Dow Jones
The main advantage of trading using opposite Crossamerica Partners and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crossamerica Partners position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Crossamerica Partners vs. Delek Energy | Crossamerica Partners vs. Sunoco LP | Crossamerica Partners vs. CVR Energy | Crossamerica Partners vs. Phillips 66 |
| Dow Jones vs. Barrick Gold Corp | Dow Jones vs. Jutal Offshore Oil | Dow Jones vs. Eastern Co | Dow Jones vs. Weyco Group |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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