Correlation Between CVR Energy and PBF Energy
Can any of the company-specific risk be diversified away by investing in both CVR 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 CVR 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 CVR Energy and PBF Energy, you can compare the effects of market volatilities on CVR 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 CVR Energy with a short position of PBF Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Energy and PBF Energy.
Diversification Opportunities for CVR Energy and PBF Energy
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CVR and PBF is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding CVR Energy and PBF Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PBF Energy and CVR 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 CVR Energy 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 CVR Energy i.e., CVR Energy and PBF Energy go up and down completely randomly.
Pair Corralation between CVR Energy and PBF Energy
Considering the 90-day investment horizon CVR Energy is expected to under-perform the PBF Energy. In addition to that, CVR Energy is 1.67 times more volatile than PBF Energy. It trades about -0.08 of its total potential returns per unit of risk. PBF Energy is currently generating about -0.02 per unit of volatility. If you would invest 3,390 in PBF Energy on August 23, 2024 and sell it today you would lose (175.00) from holding PBF Energy or give up 5.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVR Energy vs. PBF Energy
Performance |
| Timeline |
| CVR Energy |
| PBF Energy |
CVR Energy and PBF Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVR Energy and PBF Energy
The main advantage of trading using opposite CVR Energy and PBF Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVR 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.| CVR Energy vs. Delek Logistics Partners | CVR Energy vs. PBF Energy | CVR Energy vs. HF Sinclair Corp | CVR Energy vs. Par Pacific Holdings |
| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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