Correlation Between Phillips and Esso Public
Can any of the company-specific risk be diversified away by investing in both Phillips and Esso Public 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 Esso Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phillips 66 and Esso Public, you can compare the effects of market volatilities on Phillips and Esso Public 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 Esso Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phillips and Esso Public.
Diversification Opportunities for Phillips and Esso Public
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Phillips and Esso is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Phillips 66 and Esso Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esso Public 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 Esso Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esso Public has no effect on the direction of Phillips i.e., Phillips and Esso Public go up and down completely randomly.
Pair Corralation between Phillips and Esso Public
Assuming the 90 days horizon Phillips 66 is expected to generate 0.29 times more return on investment than Esso Public. However, Phillips 66 is 3.47 times less risky than Esso Public. It trades about 0.2 of its potential returns per unit of risk. Esso Public is currently generating about -0.17 per unit of risk. If you would invest 11,112 in Phillips 66 on November 8, 2024 and sell it today you would earn a total of 746.00 from holding Phillips 66 or generate 6.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phillips 66 vs. Esso Public
Performance |
| Timeline |
| Phillips 66 |
| Esso Public |
Phillips and Esso Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phillips and Esso Public
The main advantage of trading using opposite Phillips and Esso Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phillips position performs unexpectedly, Esso Public 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 Esso Public will offset losses from the drop in Esso Public's long position.| Phillips vs. Synovus Financial Corp | Phillips vs. Cleanaway Waste Management | Phillips vs. Ultra Clean Holdings | Phillips vs. PennantPark Investment |
| Esso Public vs. Neinor Homes SA | Esso Public vs. CarsalesCom | Esso Public vs. CITY OFFICE REIT | Esso Public vs. INVITATION HOMES DL |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |