Correlation Between Star Gas and Cosan SA
Can any of the company-specific risk be diversified away by investing in both Star Gas 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 Star Gas and Cosan SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Star Gas Partners and Cosan SA ADR, you can compare the effects of market volatilities on Star Gas 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 Star Gas with a short position of Cosan SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Gas and Cosan SA.
Diversification Opportunities for Star Gas and Cosan SA
Excellent diversification
The 3 months correlation between Star and Cosan is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Star Gas Partners 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 Star Gas 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 Star Gas Partners 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 Star Gas i.e., Star Gas and Cosan SA go up and down completely randomly.
Pair Corralation between Star Gas and Cosan SA
Considering the 90-day investment horizon Star Gas Partners is expected to under-perform the Cosan SA. But the stock apears to be less risky and, when comparing its historical volatility, Star Gas Partners is 2.88 times less risky than Cosan SA. The stock trades about -0.13 of its potential returns per unit of risk. The Cosan SA ADR is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 522.00 in Cosan SA ADR on March 29, 2025 and sell it today you would lose (23.00) from holding Cosan SA ADR or give up 4.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Star Gas Partners vs. Cosan SA ADR
Performance |
| Timeline |
| Star Gas Partners |
| Cosan SA ADR |
Star Gas and Cosan SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Star Gas and Cosan SA
The main advantage of trading using opposite Star Gas and Cosan SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Gas 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.| Star Gas vs. Ultrapar Participacoes SA | Star Gas vs. Par Pacific Holdings | Star Gas vs. Delek Energy | Star Gas vs. Crossamerica Partners LP |
| 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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