Correlation Between Star Gas and Valero Energy
Can any of the company-specific risk be diversified away by investing in both Star Gas and Valero 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 Star Gas and Valero Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Star Gas Partners and Valero Energy, you can compare the effects of market volatilities on Star Gas and Valero 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 Star Gas with a short position of Valero Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Gas and Valero Energy.
Diversification Opportunities for Star Gas and Valero Energy
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Star and Valero is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Star Gas Partners and Valero Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valero Energy and Star Gas 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 Star Gas Partners are associated (or correlated) with Valero Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valero Energy has no effect on the direction of Star Gas i.e., Star Gas and Valero Energy go up and down completely randomly.
Pair Corralation between Star Gas and Valero Energy
Considering the 90-day investment horizon Star Gas Partners is expected to generate 1.26 times more return on investment than Valero Energy. However, Star Gas is 1.26 times more volatile than Valero Energy. It trades about 0.05 of its potential returns per unit of risk. Valero Energy is currently generating about 0.03 per unit of risk. If you would invest 780.00 in Star Gas Partners on August 24, 2024 and sell it today you would earn a total of 468.00 from holding Star Gas Partners or generate 60.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Star Gas Partners vs. Valero Energy
Performance |
| Timeline |
| Star Gas Partners |
| Valero Energy |
Star Gas and Valero Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Star Gas and Valero Energy
The main advantage of trading using opposite Star Gas and Valero Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Gas position performs unexpectedly, Valero 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 Valero Energy will offset losses from the drop in Valero Energy's long position.| Star Gas vs. Ultrapar Participacoes SA | Star Gas vs. Par Pacific Holdings | Star Gas vs. Delek Energy | Star Gas vs. Crossamerica Partners LP |
| Valero Energy vs. Phillips 66 | Valero Energy vs. HF Sinclair Corp | Valero Energy vs. PBF Energy | Valero Energy vs. CVR Energy |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |