Correlation Between Sunoco LP and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Sunoco LP and Dow Jones 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 Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunoco LP and Dow Jones Industrial, you can compare the effects of market volatilities on Sunoco LP and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunoco LP and Dow Jones.
Diversification Opportunities for Sunoco LP and Dow Jones
Good diversification
The 3 months correlation between Sunoco and Dow is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Sunoco LP and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Sunoco LP i.e., Sunoco LP and Dow Jones go up and down completely randomly.
Pair Corralation between Sunoco LP and Dow Jones
Considering the 90-day investment horizon Sunoco LP is expected to under-perform the Dow Jones. In addition to that, Sunoco LP is 2.21 times more volatile than Dow Jones Industrial. It trades about -0.02 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.14 per unit of volatility. If you would invest 4,276,287 in Dow Jones Industrial on June 6, 2025 and sell it today you would earn a total of 250,836 from holding Dow Jones Industrial or generate 5.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunoco LP vs. Dow Jones Industrial
Performance |
| Timeline |
Sunoco LP and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Sunoco LP
Pair trading matchups for Sunoco LP
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Sunoco LP and Dow Jones
The main advantage of trading using opposite Sunoco LP and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunoco LP position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Sunoco LP vs. Delek Energy | Sunoco LP vs. Crossamerica Partners LP | Sunoco LP vs. CVR Energy | Sunoco LP vs. Phillips 66 |
| Dow Jones vs. CF Industries Holdings | Dow Jones vs. Dave Busters Entertainment | Dow Jones vs. Hawkins | Dow Jones vs. Yips Chemical 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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