Correlation Between Cosan SA and Valvoline
Can any of the company-specific risk be diversified away by investing in both Cosan SA and Valvoline 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 Cosan SA and Valvoline into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cosan SA ADR and Valvoline, you can compare the effects of market volatilities on Cosan SA and Valvoline 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 Cosan SA with a short position of Valvoline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosan SA and Valvoline.
Diversification Opportunities for Cosan SA and Valvoline
Very good diversification
The 3 months correlation between Cosan and Valvoline is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Cosan SA ADR and Valvoline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valvoline and Cosan SA 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 Cosan SA ADR are associated (or correlated) with Valvoline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valvoline has no effect on the direction of Cosan SA i.e., Cosan SA and Valvoline go up and down completely randomly.
Pair Corralation between Cosan SA and Valvoline
Given the investment horizon of 90 days Cosan SA ADR is expected to under-perform the Valvoline. In addition to that, Cosan SA is 1.6 times more volatile than Valvoline. It trades about -0.18 of its total potential returns per unit of risk. Valvoline is currently generating about 0.14 per unit of volatility. If you would invest 3,391 in Valvoline on May 27, 2025 and sell it today you would earn a total of 594.00 from holding Valvoline or generate 17.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cosan SA ADR vs. Valvoline
Performance |
| Timeline |
| Cosan SA ADR |
| Valvoline |
Cosan SA and Valvoline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cosan SA and Valvoline
The main advantage of trading using opposite Cosan SA and Valvoline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosan SA position performs unexpectedly, Valvoline 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 Valvoline will offset losses from the drop in Valvoline's long position.| Cosan SA vs. Crossamerica Partners LP | Cosan SA vs. Sunoco LP | Cosan SA vs. CVR Energy | Cosan SA vs. Phillips 66 |
| Valvoline vs. Cosan SA ADR | Valvoline vs. Delek Energy | Valvoline vs. Crossamerica Partners LP | Valvoline 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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