Correlation Between NYSE Composite and Sunoco LP
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Sunoco LP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Sunoco LP, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Sunoco LP. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Sunoco LP.
Diversification Opportunities for NYSE Composite and Sunoco LP
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NYSE and Sunoco is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Sunoco LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunoco LP 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 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 NYSE Composite i.e., NYSE Composite and Sunoco LP go up and down completely randomly.
Pair Corralation between NYSE Composite and Sunoco LP
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.47 times more return on investment than Sunoco LP. However, NYSE Composite is 2.12 times less risky than Sunoco LP. It trades about 0.17 of its potential returns per unit of risk. Sunoco LP is currently generating about 0.06 per unit of risk. If you would invest 1,901,742 in NYSE Composite on August 31, 2024 and sell it today you would earn a total of 119,240 from holding NYSE Composite or generate 6.27% 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. Sunoco LP
Performance |
| Timeline |
NYSE Composite and Sunoco LP Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Sunoco LP
Pair trading matchups for Sunoco LP
Pair Trading with NYSE Composite and Sunoco LP
The main advantage of trading using opposite NYSE Composite and Sunoco LP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |