Correlation Between PBF Energy and CVR Energy
Can any of the company-specific risk be diversified away by investing in both PBF Energy and CVR 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 PBF Energy and CVR Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PBF Energy and CVR Energy, you can compare the effects of market volatilities on PBF Energy and CVR 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 PBF Energy with a short position of CVR Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of PBF Energy and CVR Energy.
Diversification Opportunities for PBF Energy and CVR Energy
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PBF and CVR is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding PBF Energy and CVR Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVR Energy and PBF Energy 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 PBF Energy are associated (or correlated) with CVR Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVR Energy has no effect on the direction of PBF Energy i.e., PBF Energy and CVR Energy go up and down completely randomly.
Pair Corralation between PBF Energy and CVR Energy
Considering the 90-day investment horizon PBF Energy is expected to generate 0.87 times more return on investment than CVR Energy. However, PBF Energy is 1.15 times less risky than CVR Energy. It trades about -0.04 of its potential returns per unit of risk. CVR Energy is currently generating about -0.05 per unit of risk. If you would invest 4,324 in PBF Energy on August 26, 2024 and sell it today you would lose (1,125) from holding PBF Energy or give up 26.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PBF Energy vs. CVR Energy
Performance |
| Timeline |
| PBF Energy |
| CVR Energy |
PBF Energy and CVR Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PBF Energy and CVR Energy
The main advantage of trading using opposite PBF Energy and CVR Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PBF Energy position performs unexpectedly, CVR 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 CVR Energy will offset losses from the drop in CVR Energy's long position.| PBF Energy vs. Delek Energy | PBF Energy vs. CVR Energy | PBF Energy vs. Valero Energy | PBF Energy vs. Marathon Petroleum Corp |
| CVR Energy vs. Delek Logistics Partners | CVR Energy vs. PBF Energy | CVR Energy vs. HF Sinclair Corp | CVR Energy vs. Par Pacific Holdings |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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