Correlation Between Helmerich and PBF Energy
Can any of the company-specific risk be diversified away by investing in both Helmerich 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 Helmerich and PBF Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Helmerich and Payne and PBF Energy, you can compare the effects of market volatilities on Helmerich 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 Helmerich with a short position of PBF Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helmerich and PBF Energy.
Diversification Opportunities for Helmerich and PBF Energy
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Helmerich and PBF is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Helmerich and Payne and PBF Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PBF Energy and Helmerich 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 Helmerich and Payne 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 Helmerich i.e., Helmerich and PBF Energy go up and down completely randomly.
Pair Corralation between Helmerich and PBF Energy
Allowing for the 90-day total investment horizon Helmerich and Payne is expected to under-perform the PBF Energy. In addition to that, Helmerich is 1.11 times more volatile than PBF Energy. It trades about -0.17 of its total potential returns per unit of risk. PBF Energy is currently generating about 0.07 per unit of volatility. If you would invest 2,705 in PBF Energy on November 9, 2024 and sell it today you would earn a total of 105.00 from holding PBF Energy or generate 3.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Helmerich and Payne vs. PBF Energy
Performance |
| Timeline |
| Helmerich and Payne |
| PBF Energy |
Helmerich and PBF Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Helmerich and PBF Energy
The main advantage of trading using opposite Helmerich and PBF Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Helmerich 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.| Helmerich vs. Nabors Industries | Helmerich vs. Precision Drilling | Helmerich vs. Seadrill Limited | Helmerich vs. Patterson UTI Energy |
| 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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