Correlation Between Ultrapar Participacoes and Phillips
Can any of the company-specific risk be diversified away by investing in both Ultrapar Participacoes and Phillips 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 Ultrapar Participacoes and Phillips into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ultrapar Participacoes SA and Phillips 66, you can compare the effects of market volatilities on Ultrapar Participacoes and Phillips 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 Ultrapar Participacoes with a short position of Phillips. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultrapar Participacoes and Phillips.
Diversification Opportunities for Ultrapar Participacoes and Phillips
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ultrapar and Phillips is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ultrapar Participacoes SA and Phillips 66 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phillips 66 and Ultrapar Participacoes 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 Ultrapar Participacoes SA are associated (or correlated) with Phillips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phillips 66 has no effect on the direction of Ultrapar Participacoes i.e., Ultrapar Participacoes and Phillips go up and down completely randomly.
Pair Corralation between Ultrapar Participacoes and Phillips
Considering the 90-day investment horizon Ultrapar Participacoes SA is expected to under-perform the Phillips. In addition to that, Ultrapar Participacoes is 1.44 times more volatile than Phillips 66. It trades about -0.11 of its total potential returns per unit of risk. Phillips 66 is currently generating about 0.0 per unit of volatility. If you would invest 13,573 in Phillips 66 on September 5, 2024 and sell it today you would lose (125.00) from holding Phillips 66 or give up 0.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultrapar Participacoes SA vs. Phillips 66
Performance |
| Timeline |
| Ultrapar Participacoes |
| Phillips 66 |
Ultrapar Participacoes and Phillips Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultrapar Participacoes and Phillips
The main advantage of trading using opposite Ultrapar Participacoes and Phillips positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultrapar Participacoes position performs unexpectedly, Phillips 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 Phillips will offset losses from the drop in Phillips' long position.| Ultrapar Participacoes vs. CVR Energy | Ultrapar Participacoes vs. PBF Energy | Ultrapar Participacoes vs. HF Sinclair Corp | Ultrapar Participacoes vs. Par Pacific Holdings |
| Phillips vs. Marathon Petroleum Corp | Phillips vs. HF Sinclair Corp | Phillips vs. PBF Energy | Phillips vs. Sunoco LP |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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