Correlation Between CSX and USD Partners
Can any of the company-specific risk be diversified away by investing in both CSX and USD Partners 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 CSX and USD Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSX Corporation and USD Partners LP, you can compare the effects of market volatilities on CSX and USD Partners 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 CSX with a short position of USD Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSX and USD Partners.
Diversification Opportunities for CSX and USD Partners
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CSX and USD is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding CSX Corp. and USD Partners LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USD Partners LP and CSX 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 CSX Corporation are associated (or correlated) with USD Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USD Partners LP has no effect on the direction of CSX i.e., CSX and USD Partners go up and down completely randomly.
Pair Corralation between CSX and USD Partners
If you would invest 3,353 in CSX Corporation on September 1, 2024 and sell it today you would earn a total of 302.00 from holding CSX Corporation or generate 9.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
CSX Corp. vs. USD Partners LP
Performance |
| Timeline |
| CSX Corporation |
| USD Partners LP |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CSX and USD Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSX and USD Partners
The main advantage of trading using opposite CSX and USD Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSX position performs unexpectedly, USD Partners 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 USD Partners will offset losses from the drop in USD Partners' long position.| CSX vs. Union Pacific | CSX vs. Canadian National Railway | CSX vs. Canadian Pacific Railway | CSX vs. Westinghouse Air Brake |
| USD Partners vs. Greenbrier Companies | USD Partners vs. LB Foster | USD Partners vs. Freightcar America | USD Partners vs. Westinghouse Air Brake |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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