Correlation Between Clean Energy and PBF Energy
Can any of the company-specific risk be diversified away by investing in both Clean Energy and PBF Energy 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 Clean Energy and PBF Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clean Energy Fuels and PBF Energy, you can compare the effects of market volatilities on Clean Energy and PBF Energy 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 Clean Energy with a short position of PBF Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Energy and PBF Energy.
Diversification Opportunities for Clean Energy and PBF Energy
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Clean and PBF is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Clean Energy Fuels and PBF Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PBF Energy and Clean Energy 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 Clean Energy Fuels are associated (or correlated) with PBF Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PBF Energy has no effect on the direction of Clean Energy i.e., Clean Energy and PBF Energy go up and down completely randomly.
Pair Corralation between Clean Energy and PBF Energy
Given the investment horizon of 90 days Clean Energy Fuels is expected to under-perform the PBF Energy. In addition to that, Clean Energy is 1.34 times more volatile than PBF Energy. It trades about -0.03 of its total potential returns per unit of risk. PBF Energy is currently generating about 0.01 per unit of volatility. If you would invest 3,292 in PBF Energy on August 24, 2024 and sell it today you would lose (77.00) from holding PBF Energy or give up 2.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Clean Energy Fuels vs. PBF Energy
Performance |
| Timeline |
| Clean Energy Fuels |
| PBF Energy |
Clean Energy and PBF Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clean Energy and PBF Energy
The main advantage of trading using opposite Clean Energy and PBF Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Energy position performs unexpectedly, PBF Energy 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 PBF Energy will offset losses from the drop in PBF Energy's long position.| Clean Energy vs. Vertex Energy | Clean Energy vs. Icahn Enterprises LP | Clean Energy vs. PBF Energy | Clean Energy vs. Delek Logistics Partners |
| PBF Energy vs. Delek Energy | PBF Energy vs. CVR Energy | PBF Energy vs. Valero Energy | PBF Energy vs. Marathon Petroleum Corp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |