Correlation Between Phillips and Clean Energy
Can any of the company-specific risk be diversified away by investing in both Phillips and Clean Energy 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 Clean Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phillips 66 and Clean Energy Fuels, you can compare the effects of market volatilities on Phillips and Clean Energy 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 Clean Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phillips and Clean Energy.
Diversification Opportunities for Phillips and Clean Energy
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Phillips and Clean is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Phillips 66 and Clean Energy Fuels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Energy Fuels 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 Clean Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Energy Fuels has no effect on the direction of Phillips i.e., Phillips and Clean Energy go up and down completely randomly.
Pair Corralation between Phillips and Clean Energy
Considering the 90-day investment horizon Phillips 66 is expected to generate 0.47 times more return on investment than Clean Energy. However, Phillips 66 is 2.12 times less risky than Clean Energy. It trades about 0.04 of its potential returns per unit of risk. Clean Energy Fuels is currently generating about -0.03 per unit of risk. If you would invest 9,694 in Phillips 66 on August 24, 2024 and sell it today you would earn a total of 3,447 from holding Phillips 66 or generate 35.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Phillips 66 vs. Clean Energy Fuels
Performance |
| Timeline |
| Phillips 66 |
| Clean Energy Fuels |
Phillips and Clean Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phillips and Clean Energy
The main advantage of trading using opposite Phillips and Clean Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phillips position performs unexpectedly, Clean Energy 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 Clean Energy will offset losses from the drop in Clean Energy's long position.| Phillips vs. Delek Logistics Partners | Phillips vs. PBF Energy | Phillips vs. HF Sinclair Corp | Phillips vs. Par Pacific Holdings |
| Clean Energy vs. Vertex Energy | Clean Energy vs. Icahn Enterprises LP | Clean Energy vs. PBF Energy | Clean Energy vs. Delek Logistics Partners |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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