Correlation Between PBF Energy and Valvoline
Can any of the company-specific risk be diversified away by investing in both PBF Energy and Valvoline 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 Valvoline into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PBF Energy and Valvoline, you can compare the effects of market volatilities on PBF Energy and Valvoline 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 Valvoline. Check out your portfolio center. Please also check ongoing floating volatility patterns of PBF Energy and Valvoline.
Diversification Opportunities for PBF Energy and Valvoline
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PBF and Valvoline is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding PBF Energy and Valvoline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valvoline 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 Valvoline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valvoline has no effect on the direction of PBF Energy i.e., PBF Energy and Valvoline go up and down completely randomly.
Pair Corralation between PBF Energy and Valvoline
Considering the 90-day investment horizon PBF Energy is expected to under-perform the Valvoline. In addition to that, PBF Energy is 1.49 times more volatile than Valvoline. It trades about -0.07 of its total potential returns per unit of risk. Valvoline is currently generating about -0.03 per unit of volatility. If you would invest 4,320 in Valvoline on November 1, 2024 and sell it today you would lose (540.50) from holding Valvoline or give up 12.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PBF Energy vs. Valvoline
Performance |
| Timeline |
| PBF Energy |
| Valvoline |
PBF Energy and Valvoline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PBF Energy and Valvoline
The main advantage of trading using opposite PBF Energy and Valvoline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PBF Energy position performs unexpectedly, Valvoline 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 Valvoline will offset losses from the drop in Valvoline's long position.| PBF Energy vs. Delek Energy | PBF Energy vs. CVR Energy | PBF Energy vs. Valero Energy | PBF Energy vs. Marathon Petroleum Corp |
| Valvoline vs. Cosan SA ADR | Valvoline vs. Delek Energy | Valvoline vs. Crossamerica Partners LP | Valvoline 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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