Correlation Between CVR Energy and Phillips
Can any of the company-specific risk be diversified away by investing in both CVR Energy and Phillips 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 Phillips into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVR Energy and Phillips 66, you can compare the effects of market volatilities on CVR Energy and Phillips 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 Phillips. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVR Energy and Phillips.
Diversification Opportunities for CVR Energy and Phillips
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CVR and Phillips is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding CVR Energy and Phillips 66 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phillips 66 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 Phillips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phillips 66 has no effect on the direction of CVR Energy i.e., CVR Energy and Phillips go up and down completely randomly.
Pair Corralation between CVR Energy and Phillips
Considering the 90-day investment horizon CVR Energy is expected to generate 1.81 times more return on investment than Phillips. However, CVR Energy is 1.81 times more volatile than Phillips 66. It trades about 0.12 of its potential returns per unit of risk. Phillips 66 is currently generating about 0.02 per unit of risk. If you would invest 1,597 in CVR Energy on November 1, 2024 and sell it today you would earn a total of 310.00 from holding CVR Energy or generate 19.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVR Energy vs. Phillips 66
Performance |
| Timeline |
| CVR Energy |
| Phillips 66 |
CVR Energy and Phillips Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVR Energy and Phillips
The main advantage of trading using opposite CVR Energy and Phillips positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVR Energy position performs unexpectedly, Phillips 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 Phillips will offset losses from the drop in Phillips' 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 |
| Phillips vs. Marathon Petroleum Corp | Phillips vs. HF Sinclair Corp | Phillips vs. PBF Energy | Phillips vs. Sunoco LP |
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 CEOs Directory module to screen CEOs from public companies around the world.
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