Correlation Between Icahn Enterprises and PBF Energy
Can any of the company-specific risk be diversified away by investing in both Icahn Enterprises 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 Icahn Enterprises and PBF Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Icahn Enterprises LP and PBF Energy, you can compare the effects of market volatilities on Icahn Enterprises 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 Icahn Enterprises with a short position of PBF Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icahn Enterprises and PBF Energy.
Diversification Opportunities for Icahn Enterprises and PBF Energy
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Icahn and PBF is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Icahn Enterprises LP and PBF Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PBF Energy and Icahn Enterprises 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 Icahn Enterprises LP 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 Icahn Enterprises i.e., Icahn Enterprises and PBF Energy go up and down completely randomly.
Pair Corralation between Icahn Enterprises and PBF Energy
Considering the 90-day investment horizon Icahn Enterprises LP is expected to under-perform the PBF Energy. In addition to that, Icahn Enterprises is 1.84 times more volatile than PBF Energy. It trades about -0.24 of its total potential returns per unit of risk. PBF Energy is currently generating about 0.04 per unit of volatility. If you would invest 3,131 in PBF Energy on August 27, 2024 and sell it today you would earn a total of 47.00 from holding PBF Energy or generate 1.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icahn Enterprises LP vs. PBF Energy
Performance |
| Timeline |
| Icahn Enterprises |
| PBF Energy |
Icahn Enterprises and PBF Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icahn Enterprises and PBF Energy
The main advantage of trading using opposite Icahn Enterprises and PBF Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icahn Enterprises 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.| Icahn Enterprises vs. Delek Energy | Icahn Enterprises vs. PBF Energy | Icahn Enterprises vs. HF Sinclair Corp | Icahn Enterprises 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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