Correlation Between PBF Energy and Par Pacific
Can any of the company-specific risk be diversified away by investing in both PBF Energy 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 PBF Energy and Par Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PBF Energy and Par Pacific Holdings, you can compare the effects of market volatilities on PBF Energy 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 PBF Energy with a short position of Par Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of PBF Energy and Par Pacific.
Diversification Opportunities for PBF Energy and Par Pacific
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PBF and Par is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding PBF Energy 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 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 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 PBF Energy i.e., PBF Energy and Par Pacific go up and down completely randomly.
Pair Corralation between PBF Energy and Par Pacific
Considering the 90-day investment horizon PBF Energy is expected to under-perform the Par Pacific. But the stock apears to be less risky and, when comparing its historical volatility, PBF Energy is 1.29 times less risky than Par Pacific. The stock trades about -0.02 of its potential returns per unit of risk. The Par Pacific Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,750 in Par Pacific Holdings on August 23, 2024 and sell it today you would lose (13.00) from holding Par Pacific Holdings or give up 0.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PBF Energy vs. Par Pacific Holdings
Performance |
| Timeline |
| PBF Energy |
| Par Pacific Holdings |
PBF Energy and Par Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PBF Energy and Par Pacific
The main advantage of trading using opposite PBF Energy and Par Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PBF Energy 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.| PBF Energy vs. Delek Energy | PBF Energy vs. CVR Energy | PBF Energy vs. Valero Energy | PBF Energy vs. Marathon Petroleum Corp |
| 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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