Correlation Between Phillips and Crossamerica Partners
Can any of the company-specific risk be diversified away by investing in both Phillips and Crossamerica Partners 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 Phillips and Crossamerica Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phillips 66 and Crossamerica Partners LP, you can compare the effects of market volatilities on Phillips and Crossamerica Partners 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 Phillips with a short position of Crossamerica Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phillips and Crossamerica Partners.
Diversification Opportunities for Phillips and Crossamerica Partners
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Phillips and Crossamerica is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Phillips 66 and Crossamerica Partners LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crossamerica Partners and Phillips 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 Phillips 66 are associated (or correlated) with Crossamerica Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crossamerica Partners has no effect on the direction of Phillips i.e., Phillips and Crossamerica Partners go up and down completely randomly.
Pair Corralation between Phillips and Crossamerica Partners
Considering the 90-day investment horizon Phillips 66 is expected to generate 1.22 times more return on investment than Crossamerica Partners. However, Phillips is 1.22 times more volatile than Crossamerica Partners LP. It trades about 0.49 of its potential returns per unit of risk. Crossamerica Partners LP is currently generating about 0.33 per unit of risk. If you would invest 11,035 in Phillips 66 on October 20, 2024 and sell it today you would earn a total of 1,018 from holding Phillips 66 or generate 9.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phillips 66 vs. Crossamerica Partners LP
Performance |
| Timeline |
| Phillips 66 |
| Crossamerica Partners |
Phillips and Crossamerica Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phillips and Crossamerica Partners
The main advantage of trading using opposite Phillips and Crossamerica Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phillips position performs unexpectedly, Crossamerica Partners 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 Crossamerica Partners will offset losses from the drop in Crossamerica Partners' long position.| Phillips vs. Marathon Petroleum Corp | Phillips vs. HF Sinclair Corp | Phillips vs. PBF Energy | Phillips vs. Sunoco LP |
| Crossamerica Partners vs. Delek Energy | Crossamerica Partners vs. Sunoco LP | Crossamerica Partners vs. CVR Energy | Crossamerica Partners vs. Phillips 66 |
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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