Correlation Between PBF Energy and Phillips
Can any of the company-specific risk be diversified away by investing in both PBF Energy and Phillips 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 Phillips into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PBF Energy and Phillips 66, you can compare the effects of market volatilities on PBF Energy and Phillips 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 Phillips. Check out your portfolio center. Please also check ongoing floating volatility patterns of PBF Energy and Phillips.
Diversification Opportunities for PBF Energy and Phillips
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PBF and Phillips is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding PBF Energy and Phillips 66 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phillips 66 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 Phillips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phillips 66 has no effect on the direction of PBF Energy i.e., PBF Energy and Phillips go up and down completely randomly.
Pair Corralation between PBF Energy and Phillips
Considering the 90-day investment horizon PBF Energy is expected to under-perform the Phillips. In addition to that, PBF Energy is 2.03 times more volatile than Phillips 66. It trades about -0.28 of its total potential returns per unit of risk. Phillips 66 is currently generating about 0.14 per unit of volatility. If you would invest 12,053 in Phillips 66 on November 18, 2024 and sell it today you would earn a total of 751.00 from holding Phillips 66 or generate 6.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PBF Energy vs. Phillips 66
Performance |
| Timeline |
| PBF Energy |
| Phillips 66 |
PBF Energy and Phillips Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PBF Energy and Phillips
The main advantage of trading using opposite PBF Energy and Phillips positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PBF Energy position performs unexpectedly, Phillips 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 Phillips will offset losses from the drop in Phillips' long position.| PBF Energy vs. Delek Energy | PBF Energy vs. CVR Energy | PBF Energy vs. Valero Energy | PBF Energy vs. Marathon Petroleum Corp |
| Phillips vs. Marathon Petroleum Corp | Phillips vs. HF Sinclair Corp | Phillips vs. PBF Energy | Phillips vs. Sunoco LP |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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