Correlation Between Crossamerica Partners and Sunoco LP
Can any of the company-specific risk be diversified away by investing in both Crossamerica Partners and Sunoco LP 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 Sunoco LP 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 Sunoco LP, you can compare the effects of market volatilities on Crossamerica Partners and Sunoco LP 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 Sunoco LP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crossamerica Partners and Sunoco LP.
Diversification Opportunities for Crossamerica Partners and Sunoco LP
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Crossamerica and Sunoco is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Crossamerica Partners LP and Sunoco LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunoco LP 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 Sunoco LP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunoco LP has no effect on the direction of Crossamerica Partners i.e., Crossamerica Partners and Sunoco LP go up and down completely randomly.
Pair Corralation between Crossamerica Partners and Sunoco LP
Given the investment horizon of 90 days Crossamerica Partners is expected to generate 1.31 times less return on investment than Sunoco LP. But when comparing it to its historical volatility, Crossamerica Partners LP is 1.0 times less risky than Sunoco LP. It trades about 0.14 of its potential returns per unit of risk. Sunoco LP is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 5,007 in Sunoco LP on November 1, 2024 and sell it today you would earn a total of 793.00 from holding Sunoco LP or generate 15.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crossamerica Partners LP vs. Sunoco LP
Performance |
| Timeline |
| Crossamerica Partners |
| Sunoco LP |
Crossamerica Partners and Sunoco LP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crossamerica Partners and Sunoco LP
The main advantage of trading using opposite Crossamerica Partners and Sunoco LP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crossamerica Partners position performs unexpectedly, Sunoco LP 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 Sunoco LP will offset losses from the drop in Sunoco LP's long position.| Crossamerica Partners vs. Delek Energy | Crossamerica Partners vs. Sunoco LP | Crossamerica Partners vs. CVR Energy | Crossamerica Partners vs. Phillips 66 |
| Sunoco LP vs. Delek Energy | Sunoco LP vs. Crossamerica Partners LP | Sunoco LP vs. CVR Energy | Sunoco LP vs. Phillips 66 |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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