Correlation Between Sunoco LP and Ultrapar Participacoes
Can any of the company-specific risk be diversified away by investing in both Sunoco LP and Ultrapar Participacoes 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 Ultrapar Participacoes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunoco LP and Ultrapar Participacoes SA, you can compare the effects of market volatilities on Sunoco LP and Ultrapar Participacoes 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 Ultrapar Participacoes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunoco LP and Ultrapar Participacoes.
Diversification Opportunities for Sunoco LP and Ultrapar Participacoes
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sunoco and Ultrapar is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Sunoco LP and Ultrapar Participacoes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultrapar Participacoes 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 Ultrapar Participacoes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultrapar Participacoes has no effect on the direction of Sunoco LP i.e., Sunoco LP and Ultrapar Participacoes go up and down completely randomly.
Pair Corralation between Sunoco LP and Ultrapar Participacoes
Considering the 90-day investment horizon Sunoco LP is expected to generate 2.11 times less return on investment than Ultrapar Participacoes. But when comparing it to its historical volatility, Sunoco LP is 1.81 times less risky than Ultrapar Participacoes. It trades about 0.06 of its potential returns per unit of risk. Ultrapar Participacoes SA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 234.00 in Ultrapar Participacoes SA on January 25, 2024 and sell it today you would earn a total of 279.00 from holding Ultrapar Participacoes SA or generate 119.23% 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. Ultrapar Participacoes SA
Performance |
| Timeline |
| Sunoco LP |
| Ultrapar Participacoes |
Sunoco LP and Ultrapar Participacoes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunoco LP and Ultrapar Participacoes
The main advantage of trading using opposite Sunoco LP and Ultrapar Participacoes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunoco LP position performs unexpectedly, Ultrapar Participacoes 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 Ultrapar Participacoes will offset losses from the drop in Ultrapar Participacoes' long position.| Sunoco LP vs. CVR Energy | Sunoco LP vs. PBF Energy | Sunoco LP vs. HF Sinclair Corp | Sunoco LP vs. Par Pacific Holdings |
| Ultrapar Participacoes vs. CVR Energy | Ultrapar Participacoes vs. PBF Energy | Ultrapar Participacoes vs. HF Sinclair Corp | Ultrapar Participacoes vs. Par Pacific Holdings |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |