Correlation Between Crossamerica Partners and Sinopec Shanghai
Can any of the company-specific risk be diversified away by investing in both Crossamerica Partners and Sinopec Shanghai 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 Sinopec Shanghai 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 Sinopec Shanghai Petrochemical, you can compare the effects of market volatilities on Crossamerica Partners and Sinopec Shanghai 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 Sinopec Shanghai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crossamerica Partners and Sinopec Shanghai.
Diversification Opportunities for Crossamerica Partners and Sinopec Shanghai
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Crossamerica and Sinopec is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Crossamerica Partners LP and Sinopec Shanghai Petrochemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinopec Shanghai Pet 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 Sinopec Shanghai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinopec Shanghai Pet has no effect on the direction of Crossamerica Partners i.e., Crossamerica Partners and Sinopec Shanghai go up and down completely randomly.
Pair Corralation between Crossamerica Partners and Sinopec Shanghai
Given the investment horizon of 90 days Crossamerica Partners LP is expected to generate 0.27 times more return on investment than Sinopec Shanghai. However, Crossamerica Partners LP is 3.75 times less risky than Sinopec Shanghai. It trades about -0.05 of its potential returns per unit of risk. Sinopec Shanghai Petrochemical is currently generating about -0.02 per unit of risk. If you would invest 2,083 in Crossamerica Partners LP on August 28, 2024 and sell it today you would lose (40.00) from holding Crossamerica Partners LP or give up 1.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crossamerica Partners LP vs. Sinopec Shanghai Petrochemical
Performance |
| Timeline |
| Crossamerica Partners |
| Sinopec Shanghai Pet |
Crossamerica Partners and Sinopec Shanghai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crossamerica Partners and Sinopec Shanghai
The main advantage of trading using opposite Crossamerica Partners and Sinopec Shanghai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crossamerica Partners position performs unexpectedly, Sinopec Shanghai 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 Sinopec Shanghai will offset losses from the drop in Sinopec Shanghai's long position.| Crossamerica Partners vs. Delek Energy | Crossamerica Partners vs. Sunoco LP | Crossamerica Partners vs. CVR Energy | Crossamerica Partners vs. Phillips 66 |
| Sinopec Shanghai vs. Cosan SA ADR | Sinopec Shanghai vs. Star Gas Partners | Sinopec Shanghai vs. Neste Oyj | Sinopec Shanghai 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |