Correlation Between Icahn Enterprises and Vertex Energy
Can any of the company-specific risk be diversified away by investing in both Icahn Enterprises and Vertex 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 Vertex 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 Vertex Energy, you can compare the effects of market volatilities on Icahn Enterprises and Vertex 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 Vertex Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icahn Enterprises and Vertex Energy.
Diversification Opportunities for Icahn Enterprises and Vertex Energy
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Icahn and Vertex is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Icahn Enterprises LP and Vertex Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vertex 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 Vertex Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vertex Energy has no effect on the direction of Icahn Enterprises i.e., Icahn Enterprises and Vertex Energy go up and down completely randomly.
Pair Corralation between Icahn Enterprises and Vertex Energy
Considering the 90-day investment horizon Icahn Enterprises LP is expected to generate 0.48 times more return on investment than Vertex Energy. However, Icahn Enterprises LP is 2.1 times less risky than Vertex Energy. It trades about -0.04 of its potential returns per unit of risk. Vertex Energy is currently generating about -0.08 per unit of risk. If you would invest 3,359 in Icahn Enterprises LP on August 24, 2024 and sell it today you would lose (2,225) from holding Icahn Enterprises LP or give up 66.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icahn Enterprises LP vs. Vertex Energy
Performance |
| Timeline |
| Icahn Enterprises |
| Vertex Energy |
Icahn Enterprises and Vertex Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icahn Enterprises and Vertex Energy
The main advantage of trading using opposite Icahn Enterprises and Vertex Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icahn Enterprises position performs unexpectedly, Vertex 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 Vertex Energy will offset losses from the drop in Vertex 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 |
| Vertex Energy vs. Clean Energy Fuels | Vertex Energy vs. Icahn Enterprises LP | Vertex Energy vs. PBF Energy | Vertex Energy vs. Delek Logistics Partners |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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