Correlation Between Icahn Enterprises and Sunoco LP
Can any of the company-specific risk be diversified away by investing in both Icahn Enterprises 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 Icahn Enterprises and Sunoco LP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Icahn Enterprises LP and Sunoco LP, you can compare the effects of market volatilities on Icahn Enterprises 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 Icahn Enterprises with a short position of Sunoco LP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icahn Enterprises and Sunoco LP.
Diversification Opportunities for Icahn Enterprises and Sunoco LP
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Icahn and Sunoco is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Icahn Enterprises LP and Sunoco LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunoco LP and Icahn Enterprises 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 Icahn Enterprises 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 Icahn Enterprises i.e., Icahn Enterprises and Sunoco LP go up and down completely randomly.
Pair Corralation between Icahn Enterprises and Sunoco LP
Considering the 90-day investment horizon Icahn Enterprises LP is expected to under-perform the Sunoco LP. In addition to that, Icahn Enterprises is 2.38 times more volatile than Sunoco LP. It trades about -0.16 of its total potential returns per unit of risk. Sunoco LP is currently generating about 0.3 per unit of volatility. If you would invest 5,014 in Sunoco LP on August 31, 2024 and sell it today you would earn a total of 449.00 from holding Sunoco LP or generate 8.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icahn Enterprises LP vs. Sunoco LP
Performance |
| Timeline |
| Icahn Enterprises |
| Sunoco LP |
Icahn Enterprises and Sunoco LP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icahn Enterprises and Sunoco LP
The main advantage of trading using opposite Icahn Enterprises and Sunoco LP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icahn Enterprises 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.| Icahn Enterprises vs. Delek Energy | Icahn Enterprises vs. PBF Energy | Icahn Enterprises vs. HF Sinclair Corp | Icahn Enterprises vs. Delek Logistics Partners |
| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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