Correlation Between DCC PLC and Crossamerica Partners
Can any of the company-specific risk be diversified away by investing in both DCC PLC and Crossamerica 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 DCC PLC and Crossamerica Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DCC PLC ADR and Crossamerica Partners LP, you can compare the effects of market volatilities on DCC PLC and Crossamerica 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 DCC PLC with a short position of Crossamerica Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of DCC PLC and Crossamerica Partners.
Diversification Opportunities for DCC PLC and Crossamerica Partners
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DCC and Crossamerica is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding DCC PLC ADR and Crossamerica Partners LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crossamerica Partners and DCC PLC 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 DCC PLC ADR are associated (or correlated) with Crossamerica Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crossamerica Partners has no effect on the direction of DCC PLC i.e., DCC PLC and Crossamerica Partners go up and down completely randomly.
Pair Corralation between DCC PLC and Crossamerica Partners
Assuming the 90 days horizon DCC PLC is expected to generate 3.07 times less return on investment than Crossamerica Partners. But when comparing it to its historical volatility, DCC PLC ADR is 5.68 times less risky than Crossamerica Partners. It trades about 0.09 of its potential returns per unit of risk. Crossamerica Partners LP is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,757 in Crossamerica Partners LP on September 12, 2024 and sell it today you would earn a total of 385.00 from holding Crossamerica Partners LP or generate 21.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DCC PLC ADR vs. Crossamerica Partners LP
Performance |
| Timeline |
| DCC PLC ADR |
| Crossamerica Partners |
DCC PLC and Crossamerica Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DCC PLC and Crossamerica Partners
The main advantage of trading using opposite DCC PLC and Crossamerica Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DCC PLC position performs unexpectedly, Crossamerica 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 Crossamerica Partners will offset losses from the drop in Crossamerica Partners' long position.| DCC PLC vs. Eneos Holdings ADR | DCC PLC vs. HF Sinclair Corp | DCC PLC vs. Idemitsu Kosan CoLtd | DCC PLC vs. PBF Energy |
| Crossamerica Partners vs. Delek Energy | Crossamerica Partners vs. Sunoco LP | Crossamerica Partners vs. CVR Energy | Crossamerica Partners 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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