Correlation Between Sunoco LP and Cosan SA
Can any of the company-specific risk be diversified away by investing in both Sunoco LP 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 Sunoco LP and Cosan SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunoco LP and Cosan SA ADR, you can compare the effects of market volatilities on Sunoco LP 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 Sunoco LP with a short position of Cosan SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunoco LP and Cosan SA.
Diversification Opportunities for Sunoco LP and Cosan SA
Modest diversification
The 3 months correlation between Sunoco and Cosan is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Sunoco LP 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 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 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 Sunoco LP i.e., Sunoco LP and Cosan SA go up and down completely randomly.
Pair Corralation between Sunoco LP and Cosan SA
Considering the 90-day investment horizon Sunoco LP is expected to generate 0.49 times more return on investment than Cosan SA. However, Sunoco LP is 2.06 times less risky than Cosan SA. It trades about 0.0 of its potential returns per unit of risk. Cosan SA ADR is currently generating about -0.13 per unit of risk. If you would invest 5,272 in Sunoco LP on June 2, 2025 and sell it today you would lose (42.00) from holding Sunoco LP or give up 0.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunoco LP vs. Cosan SA ADR
Performance |
| Timeline |
| Sunoco LP |
| Cosan SA ADR |
Sunoco LP and Cosan SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunoco LP and Cosan SA
The main advantage of trading using opposite Sunoco LP and Cosan SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunoco LP 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.| Sunoco LP vs. Delek Energy | Sunoco LP vs. Crossamerica Partners LP | Sunoco LP vs. CVR Energy | Sunoco LP vs. Phillips 66 |
| Cosan SA vs. Crossamerica Partners LP | Cosan SA vs. Sunoco LP | Cosan SA vs. CVR Energy | Cosan SA vs. PBF 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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