Correlation Between Energy Transfer and Par Pacific
Can any of the company-specific risk be diversified away by investing in both Energy Transfer and Par Pacific 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 Energy Transfer and Par Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Transfer LP and Par Pacific Holdings, you can compare the effects of market volatilities on Energy Transfer and Par Pacific 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 Energy Transfer with a short position of Par Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Transfer and Par Pacific.
Diversification Opportunities for Energy Transfer and Par Pacific
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Energy and Par is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Energy Transfer LP and Par Pacific Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Par Pacific Holdings and Energy Transfer 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 Energy Transfer LP are associated (or correlated) with Par Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Par Pacific Holdings has no effect on the direction of Energy Transfer i.e., Energy Transfer and Par Pacific go up and down completely randomly.
Pair Corralation between Energy Transfer and Par Pacific
Allowing for the 90-day total investment horizon Energy Transfer LP is expected to generate 0.44 times more return on investment than Par Pacific. However, Energy Transfer LP is 2.27 times less risky than Par Pacific. It trades about 0.13 of its potential returns per unit of risk. Par Pacific Holdings is currently generating about 0.0 per unit of risk. If you would invest 1,001 in Energy Transfer LP on August 27, 2024 and sell it today you would earn a total of 906.00 from holding Energy Transfer LP or generate 90.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energy Transfer LP vs. Par Pacific Holdings
Performance |
| Timeline |
| Energy Transfer LP |
| Par Pacific Holdings |
Energy Transfer and Par Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Transfer and Par Pacific
The main advantage of trading using opposite Energy Transfer and Par Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Transfer position performs unexpectedly, Par Pacific 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 Par Pacific will offset losses from the drop in Par Pacific's long position.| Energy Transfer vs. Kinder Morgan | Energy Transfer vs. MPLX LP | Energy Transfer vs. Enbridge | Energy Transfer vs. Enterprise Products Partners |
| Par Pacific vs. Delek Logistics Partners | Par Pacific vs. CVR Energy | Par Pacific vs. PBF Energy | Par Pacific vs. HF Sinclair 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.
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