Correlation Between MRC Global and Par Pacific
Can any of the company-specific risk be diversified away by investing in both MRC Global 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 MRC Global and Par Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MRC Global and Par Pacific Holdings, you can compare the effects of market volatilities on MRC Global 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 MRC Global with a short position of Par Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of MRC Global and Par Pacific.
Diversification Opportunities for MRC Global and Par Pacific
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between MRC and Par is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding MRC Global 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 MRC Global 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 MRC Global 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 MRC Global i.e., MRC Global and Par Pacific go up and down completely randomly.
Pair Corralation between MRC Global and Par Pacific
Considering the 90-day investment horizon MRC Global is expected to generate 1.01 times more return on investment than Par Pacific. However, MRC Global is 1.01 times more volatile than Par Pacific Holdings. It trades about 0.02 of its potential returns per unit of risk. Par Pacific Holdings is currently generating about -0.02 per unit of risk. If you would invest 1,315 in MRC Global on August 27, 2024 and sell it today you would earn a total of 91.00 from holding MRC Global or generate 6.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MRC Global vs. Par Pacific Holdings
Performance |
| Timeline |
| MRC Global |
| Par Pacific Holdings |
MRC Global and Par Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MRC Global and Par Pacific
The main advantage of trading using opposite MRC Global and Par Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MRC Global 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.| MRC Global vs. NOV Inc | MRC Global vs. Ranger Energy Services | MRC Global vs. Oil States International | MRC Global vs. Geospace Technologies |
| 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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