Correlation Between Crossamerica Partners and Ultrapar Participacoes
Can any of the company-specific risk be diversified away by investing in both Crossamerica Partners and Ultrapar Participacoes 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 Ultrapar Participacoes 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 Ultrapar Participacoes SA, you can compare the effects of market volatilities on Crossamerica Partners and Ultrapar Participacoes 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 Ultrapar Participacoes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crossamerica Partners and Ultrapar Participacoes.
Diversification Opportunities for Crossamerica Partners and Ultrapar Participacoes
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Crossamerica and Ultrapar is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Crossamerica Partners LP and Ultrapar Participacoes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultrapar Participacoes 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 Ultrapar Participacoes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultrapar Participacoes has no effect on the direction of Crossamerica Partners i.e., Crossamerica Partners and Ultrapar Participacoes go up and down completely randomly.
Pair Corralation between Crossamerica Partners and Ultrapar Participacoes
Given the investment horizon of 90 days Crossamerica Partners LP is expected to generate 0.62 times more return on investment than Ultrapar Participacoes. However, Crossamerica Partners LP is 1.61 times less risky than Ultrapar Participacoes. It trades about 0.05 of its potential returns per unit of risk. Ultrapar Participacoes SA is currently generating about -0.12 per unit of risk. If you would invest 1,883 in Crossamerica Partners LP on August 24, 2024 and sell it today you would earn a total of 139.00 from holding Crossamerica Partners LP or generate 7.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crossamerica Partners LP vs. Ultrapar Participacoes SA
Performance |
| Timeline |
| Crossamerica Partners |
| Ultrapar Participacoes |
Crossamerica Partners and Ultrapar Participacoes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crossamerica Partners and Ultrapar Participacoes
The main advantage of trading using opposite Crossamerica Partners and Ultrapar Participacoes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crossamerica Partners position performs unexpectedly, Ultrapar Participacoes 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 Ultrapar Participacoes will offset losses from the drop in Ultrapar Participacoes' long position.| Crossamerica Partners vs. Delek Energy | Crossamerica Partners vs. Sunoco LP | Crossamerica Partners vs. CVR Energy | Crossamerica Partners vs. Phillips 66 |
| Ultrapar Participacoes vs. Star Gas Partners | Ultrapar Participacoes vs. Par Pacific Holdings | Ultrapar Participacoes vs. Delek Energy | Ultrapar Participacoes vs. Crossamerica Partners LP |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |