Correlation Between Murphy USA and Alimentation Couchen
Can any of the company-specific risk be diversified away by investing in both Murphy USA and Alimentation Couchen 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 Murphy USA and Alimentation Couchen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Murphy USA and Alimentation Couchen Tard, you can compare the effects of market volatilities on Murphy USA and Alimentation Couchen 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 Murphy USA with a short position of Alimentation Couchen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Murphy USA and Alimentation Couchen.
Diversification Opportunities for Murphy USA and Alimentation Couchen
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Murphy and Alimentation is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Murphy USA and Alimentation Couchen Tard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alimentation Couchen Tard and Murphy USA 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 Murphy USA are associated (or correlated) with Alimentation Couchen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alimentation Couchen Tard has no effect on the direction of Murphy USA i.e., Murphy USA and Alimentation Couchen go up and down completely randomly.
Pair Corralation between Murphy USA and Alimentation Couchen
Given the investment horizon of 90 days Murphy USA is expected to under-perform the Alimentation Couchen. In addition to that, Murphy USA is 1.1 times more volatile than Alimentation Couchen Tard. It trades about -0.24 of its total potential returns per unit of risk. Alimentation Couchen Tard is currently generating about -0.24 per unit of volatility. If you would invest 5,511 in Alimentation Couchen Tard on October 29, 2024 and sell it today you would lose (232.00) from holding Alimentation Couchen Tard or give up 4.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Murphy USA vs. Alimentation Couchen Tard
Performance |
| Timeline |
| Murphy USA |
| Alimentation Couchen Tard |
Murphy USA and Alimentation Couchen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Murphy USA and Alimentation Couchen
The main advantage of trading using opposite Murphy USA and Alimentation Couchen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Murphy USA position performs unexpectedly, Alimentation Couchen 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 Alimentation Couchen will offset losses from the drop in Alimentation Couchen's long position.| Murphy USA vs. Group 1 Automotive | Murphy USA vs. Murphy Oil | Murphy USA vs. LCI Industries | Murphy USA vs. Penske Automotive Group |
| Alimentation Couchen vs. Arko Corp | Alimentation Couchen vs. Arko Corp | Alimentation Couchen vs. Sportsmans | Alimentation Couchen vs. Murphy USA |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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