Correlation Between Neste Oyj and Crossamerica Partners
Can any of the company-specific risk be diversified away by investing in both Neste Oyj 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 Neste Oyj and Crossamerica Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neste Oyj and Crossamerica Partners LP, you can compare the effects of market volatilities on Neste Oyj 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 Neste Oyj with a short position of Crossamerica Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neste Oyj and Crossamerica Partners.
Diversification Opportunities for Neste Oyj and Crossamerica Partners
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Neste and Crossamerica is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Neste Oyj and Crossamerica Partners LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crossamerica Partners and Neste Oyj 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 Neste Oyj 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 Neste Oyj i.e., Neste Oyj and Crossamerica Partners go up and down completely randomly.
Pair Corralation between Neste Oyj and Crossamerica Partners
Assuming the 90 days horizon Neste Oyj is expected to under-perform the Crossamerica Partners. In addition to that, Neste Oyj is 1.44 times more volatile than Crossamerica Partners LP. It trades about -0.26 of its total potential returns per unit of risk. Crossamerica Partners LP is currently generating about -0.05 per unit of volatility. If you would invest 2,083 in Crossamerica Partners LP on August 27, 2024 and sell it today you would lose (40.00) from holding Crossamerica Partners LP or give up 1.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neste Oyj vs. Crossamerica Partners LP
Performance |
| Timeline |
| Neste Oyj |
| Crossamerica Partners |
Neste Oyj and Crossamerica Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neste Oyj and Crossamerica Partners
The main advantage of trading using opposite Neste Oyj and Crossamerica Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neste Oyj 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.| Neste Oyj vs. Cosan SA ADR | Neste Oyj vs. Ultrapar Participacoes SA | Neste Oyj vs. Delek Logistics Partners | Neste Oyj vs. Sunoco LP |
| 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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