Correlation Between Phillips and Icahn Enterprises
Can any of the company-specific risk be diversified away by investing in both Phillips and Icahn Enterprises 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 Icahn Enterprises into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phillips 66 and Icahn Enterprises LP, you can compare the effects of market volatilities on Phillips and Icahn Enterprises 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 Icahn Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phillips and Icahn Enterprises.
Diversification Opportunities for Phillips and Icahn Enterprises
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Phillips and Icahn is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Phillips 66 and Icahn Enterprises LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icahn Enterprises 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 Icahn Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icahn Enterprises has no effect on the direction of Phillips i.e., Phillips and Icahn Enterprises go up and down completely randomly.
Pair Corralation between Phillips and Icahn Enterprises
Considering the 90-day investment horizon Phillips 66 is expected to generate 0.65 times more return on investment than Icahn Enterprises. However, Phillips 66 is 1.53 times less risky than Icahn Enterprises. It trades about 0.02 of its potential returns per unit of risk. Icahn Enterprises LP is currently generating about -0.13 per unit of risk. If you would invest 11,896 in Phillips 66 on November 1, 2024 and sell it today you would earn a total of 185.00 from holding Phillips 66 or generate 1.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phillips 66 vs. Icahn Enterprises LP
Performance |
| Timeline |
| Phillips 66 |
| Icahn Enterprises |
Phillips and Icahn Enterprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phillips and Icahn Enterprises
The main advantage of trading using opposite Phillips and Icahn Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phillips position performs unexpectedly, Icahn Enterprises 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 Icahn Enterprises will offset losses from the drop in Icahn Enterprises' long position.| Phillips vs. Marathon Petroleum Corp | Phillips vs. HF Sinclair Corp | Phillips vs. PBF Energy | Phillips vs. Sunoco LP |
| Icahn Enterprises vs. Delek Energy | Icahn Enterprises vs. PBF Energy | Icahn Enterprises vs. HF Sinclair Corp | Icahn Enterprises 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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