Correlation Between NYSE Composite and Crossamerica Partners
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Crossamerica Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Crossamerica Partners LP, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Crossamerica Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Crossamerica Partners.
Diversification Opportunities for NYSE Composite and Crossamerica Partners
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NYSE and Crossamerica is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Crossamerica Partners LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crossamerica Partners and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Crossamerica Partners go up and down completely randomly.
Pair Corralation between NYSE Composite and Crossamerica Partners
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.37 times more return on investment than Crossamerica Partners. However, NYSE Composite is 2.7 times less risky than Crossamerica Partners. It trades about 0.13 of its potential returns per unit of risk. Crossamerica Partners LP is currently generating about -0.02 per unit of risk. If you would invest 1,959,424 in NYSE Composite on August 24, 2024 and sell it today you would earn a total of 37,406 from holding NYSE Composite or generate 1.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Crossamerica Partners LP
Performance |
| Timeline |
NYSE Composite and Crossamerica Partners Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Crossamerica Partners LP
Pair trading matchups for Crossamerica Partners
Pair Trading with NYSE Composite and Crossamerica Partners
The main advantage of trading using opposite NYSE Composite and Crossamerica Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Awilco Drilling PLC | NYSE Composite vs. AKITA Drilling | NYSE Composite vs. SunOpta | NYSE Composite vs. Delek Drilling |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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