Correlation Between PBF Energy and RaySearch Laboratories
Can any of the company-specific risk be diversified away by investing in both PBF Energy and RaySearch Laboratories 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 RaySearch Laboratories into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PBF Energy and RaySearch Laboratories AB, you can compare the effects of market volatilities on PBF Energy and RaySearch Laboratories 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 RaySearch Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of PBF Energy and RaySearch Laboratories.
Diversification Opportunities for PBF Energy and RaySearch Laboratories
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PBF and RaySearch is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding PBF Energy and RaySearch Laboratories AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RaySearch Laboratories 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 RaySearch Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RaySearch Laboratories has no effect on the direction of PBF Energy i.e., PBF Energy and RaySearch Laboratories go up and down completely randomly.
Pair Corralation between PBF Energy and RaySearch Laboratories
Considering the 90-day investment horizon PBF Energy is expected to under-perform the RaySearch Laboratories. But the stock apears to be less risky and, when comparing its historical volatility, PBF Energy is 1.98 times less risky than RaySearch Laboratories. The stock trades about -0.04 of its potential returns per unit of risk. The RaySearch Laboratories AB is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 675.00 in RaySearch Laboratories AB on December 16, 2024 and sell it today you would earn a total of 1,999 from holding RaySearch Laboratories AB or generate 296.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 43.64% |
| Values | Daily Returns |
PBF Energy vs. RaySearch Laboratories AB
Performance |
| Timeline |
| PBF Energy |
| RaySearch Laboratories |
PBF Energy and RaySearch Laboratories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PBF Energy and RaySearch Laboratories
The main advantage of trading using opposite PBF Energy and RaySearch Laboratories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PBF Energy position performs unexpectedly, RaySearch Laboratories 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 RaySearch Laboratories will offset losses from the drop in RaySearch Laboratories' long position.| PBF Energy vs. Delek Energy | ||
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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