Correlation Between Par Pacific and Delek Energy
Can any of the company-specific risk be diversified away by investing in both Par Pacific and Delek 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 Par Pacific and Delek Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Par Pacific Holdings and Delek Energy, you can compare the effects of market volatilities on Par Pacific and Delek 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 Par Pacific with a short position of Delek Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Par Pacific and Delek Energy.
Diversification Opportunities for Par Pacific and Delek Energy
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Par and Delek is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Par Pacific Holdings and Delek Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Energy and Par Pacific 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 Par Pacific Holdings are associated (or correlated) with Delek Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Energy has no effect on the direction of Par Pacific i.e., Par Pacific and Delek Energy go up and down completely randomly.
Pair Corralation between Par Pacific and Delek Energy
Given the investment horizon of 90 days Par Pacific is expected to generate 15.9 times less return on investment than Delek Energy. In addition to that, Par Pacific is 1.17 times more volatile than Delek Energy. It trades about 0.01 of its total potential returns per unit of risk. Delek Energy is currently generating about 0.14 per unit of volatility. If you would invest 1,689 in Delek Energy on August 23, 2024 and sell it today you would earn a total of 150.00 from holding Delek Energy or generate 8.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Par Pacific Holdings vs. Delek Energy
Performance |
| Timeline |
| Par Pacific Holdings |
| Delek Energy |
Par Pacific and Delek Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Par Pacific and Delek Energy
The main advantage of trading using opposite Par Pacific and Delek Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Par Pacific position performs unexpectedly, Delek 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 Delek Energy will offset losses from the drop in Delek Energy's long position.| Par Pacific vs. Delek Logistics Partners | Par Pacific vs. CVR Energy | Par Pacific vs. PBF Energy | Par Pacific vs. HF Sinclair Corp |
| Delek Energy vs. Crossamerica Partners LP | Delek Energy vs. Sunoco LP | Delek Energy vs. CVR Energy | Delek Energy vs. Phillips 66 |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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