Correlation Between Sunoco LP and DCC PLC
Can any of the company-specific risk be diversified away by investing in both Sunoco LP and DCC PLC 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 Sunoco LP and DCC PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunoco LP and DCC PLC ADR, you can compare the effects of market volatilities on Sunoco LP and DCC PLC 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 Sunoco LP with a short position of DCC PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunoco LP and DCC PLC.
Diversification Opportunities for Sunoco LP and DCC PLC
Poor diversification
The 3 months correlation between Sunoco and DCC is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Sunoco LP and DCC PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DCC PLC ADR and Sunoco LP 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 Sunoco LP are associated (or correlated) with DCC PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DCC PLC ADR has no effect on the direction of Sunoco LP i.e., Sunoco LP and DCC PLC go up and down completely randomly.
Pair Corralation between Sunoco LP and DCC PLC
Considering the 90-day investment horizon Sunoco LP is expected to generate 8.19 times more return on investment than DCC PLC. However, Sunoco LP is 8.19 times more volatile than DCC PLC ADR. It trades about 0.06 of its potential returns per unit of risk. DCC PLC ADR is currently generating about 0.09 per unit of risk. If you would invest 5,179 in Sunoco LP on September 5, 2024 and sell it today you would earn a total of 503.00 from holding Sunoco LP or generate 9.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunoco LP vs. DCC PLC ADR
Performance |
| Timeline |
| Sunoco LP |
| DCC PLC ADR |
Sunoco LP and DCC PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunoco LP and DCC PLC
The main advantage of trading using opposite Sunoco LP and DCC PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunoco LP position performs unexpectedly, DCC PLC 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 DCC PLC will offset losses from the drop in DCC PLC's long position.| Sunoco LP vs. CVR Energy | Sunoco LP vs. PBF Energy | Sunoco LP vs. HF Sinclair Corp | Sunoco LP vs. Par Pacific Holdings |
| DCC PLC vs. Ultrapar Participacoes SA | DCC PLC vs. Sunoco LP | DCC PLC vs. HF Sinclair Corp | DCC PLC vs. Delek Energy |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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