Correlation Between Par Pacific and Cosan SA
Can any of the company-specific risk be diversified away by investing in both Par Pacific and Cosan SA 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 Par Pacific and Cosan SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Par Pacific Holdings and Cosan SA ADR, you can compare the effects of market volatilities on Par Pacific and Cosan SA 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 Par Pacific with a short position of Cosan SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Par Pacific and Cosan SA.
Diversification Opportunities for Par Pacific and Cosan SA
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Par and Cosan is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Par Pacific Holdings and Cosan SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosan SA ADR and Par Pacific 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 Par Pacific Holdings are associated (or correlated) with Cosan SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cosan SA ADR has no effect on the direction of Par Pacific i.e., Par Pacific and Cosan SA go up and down completely randomly.
Pair Corralation between Par Pacific and Cosan SA
Given the investment horizon of 90 days Par Pacific Holdings is expected to generate 1.01 times more return on investment than Cosan SA. However, Par Pacific is 1.01 times more volatile than Cosan SA ADR. It trades about -0.02 of its potential returns per unit of risk. Cosan SA ADR is currently generating about -0.04 per unit of risk. If you would invest 2,650 in Par Pacific Holdings on November 9, 2024 and sell it today you would lose (955.00) from holding Par Pacific Holdings or give up 36.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Par Pacific Holdings vs. Cosan SA ADR
Performance |
| Timeline |
| Par Pacific Holdings |
| Cosan SA ADR |
Par Pacific and Cosan SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Par Pacific and Cosan SA
The main advantage of trading using opposite Par Pacific and Cosan SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Par Pacific position performs unexpectedly, Cosan SA 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 Cosan SA will offset losses from the drop in Cosan SA's long position.| Par Pacific vs. Delek Logistics Partners | Par Pacific vs. CVR Energy | Par Pacific vs. PBF Energy | Par Pacific vs. HF Sinclair Corp |
| Cosan SA vs. Delek Energy | Cosan SA vs. Crossamerica Partners LP | Cosan SA vs. Par Pacific Holdings | Cosan SA vs. Valvoline |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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