Correlation Between Crossamerica Partners and USA Compression
Can any of the company-specific risk be diversified away by investing in both Crossamerica Partners and USA Compression 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 USA Compression 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 USA Compression Partners, you can compare the effects of market volatilities on Crossamerica Partners and USA Compression 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 USA Compression. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crossamerica Partners and USA Compression.
Diversification Opportunities for Crossamerica Partners and USA Compression
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Crossamerica and USA is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Crossamerica Partners LP and USA Compression Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USA Compression Partners 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 USA Compression. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USA Compression Partners has no effect on the direction of Crossamerica Partners i.e., Crossamerica Partners and USA Compression go up and down completely randomly.
Pair Corralation between Crossamerica Partners and USA Compression
Given the investment horizon of 90 days Crossamerica Partners LP is expected to under-perform the USA Compression. In addition to that, Crossamerica Partners is 1.04 times more volatile than USA Compression Partners. It trades about -0.05 of its total potential returns per unit of risk. USA Compression Partners is currently generating about 0.21 per unit of volatility. If you would invest 2,212 in USA Compression Partners on August 27, 2024 and sell it today you would earn a total of 158.00 from holding USA Compression Partners or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crossamerica Partners LP vs. USA Compression Partners
Performance |
| Timeline |
| Crossamerica Partners |
| USA Compression Partners |
Crossamerica Partners and USA Compression Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crossamerica Partners and USA Compression
The main advantage of trading using opposite Crossamerica Partners and USA Compression positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crossamerica Partners position performs unexpectedly, USA Compression 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 USA Compression will offset losses from the drop in USA Compression's long position.| Crossamerica Partners vs. Delek Energy | Crossamerica Partners vs. Sunoco LP | Crossamerica Partners vs. CVR Energy | Crossamerica Partners vs. Phillips 66 |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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