Correlation Between Crossamerica Partners and PTL

Can any of the company-specific risk be diversified away by investing in both Crossamerica Partners and PTL 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 Crossamerica Partners and PTL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Crossamerica Partners LP and PTL LTD Ordinary, you can compare the effects of market volatilities on Crossamerica Partners and PTL 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 Crossamerica Partners with a short position of PTL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crossamerica Partners and PTL.

Diversification Opportunities for Crossamerica Partners and PTL

0.61

Correlation Coefficient

Crossamerica Partners  PTL

Poor diversification

The 3 months correlation between Crossamerica and PTL is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Crossamerica Partners LP and PTL LTD Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTL LTD Ordinary and Crossamerica Partners 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 Crossamerica Partners LP are associated (or correlated) with PTL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTL LTD Ordinary has no effect on the direction of Crossamerica Partners i.e., Crossamerica Partners and PTL go up and down completely randomly.

Pair Corralation between Crossamerica Partners and PTL

Given the investment horizon of 90 days Crossamerica Partners is expected to generate 18.19 times less return on investment than PTL. But when comparing it to its historical volatility, Crossamerica Partners LP is 11.51 times less risky than PTL. It trades about 0.05 of its potential returns per unit of risk. PTL LTD Ordinary is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  411.00  in PTL LTD Ordinary on October 24, 2024 and sell it today you would lose (91.00) from holding PTL LTD Ordinary or give up 22.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Crossamerica Partners LP  vs.  PTL LTD Ordinary

Crossamerica Partners

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Crossamerica Partners LP are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Crossamerica Partners is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

PTL LTD Ordinary

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PTL LTD Ordinary are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting essential indicators, PTL exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Crossamerica Partners and PTL

The main advantage of trading using opposite Crossamerica Partners and PTL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crossamerica Partners position performs unexpectedly, PTL 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 PTL will offset losses from the drop in PTL's long position.

The idea behind Crossamerica Partners LP and PTL LTD Ordinary pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.