Correlation Between Valero Energy and Eneos Holdings
Can any of the company-specific risk be diversified away by investing in both Valero Energy and Eneos Holdings 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 Valero Energy and Eneos Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valero Energy and Eneos Holdings ADR, you can compare the effects of market volatilities on Valero Energy and Eneos Holdings 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 Valero Energy with a short position of Eneos Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valero Energy and Eneos Holdings.
Diversification Opportunities for Valero Energy and Eneos Holdings
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Valero and Eneos is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Valero Energy and Eneos Holdings ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eneos Holdings ADR and Valero Energy 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 Valero Energy are associated (or correlated) with Eneos Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eneos Holdings ADR has no effect on the direction of Valero Energy i.e., Valero Energy and Eneos Holdings go up and down completely randomly.
Pair Corralation between Valero Energy and Eneos Holdings
Considering the 90-day investment horizon Valero Energy is expected to under-perform the Eneos Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Valero Energy is 3.5 times less risky than Eneos Holdings. The stock trades about -0.03 of its potential returns per unit of risk. The Eneos Holdings ADR is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 843.00 in Eneos Holdings ADR on November 3, 2024 and sell it today you would earn a total of 102.00 from holding Eneos Holdings ADR or generate 12.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Valero Energy vs. Eneos Holdings ADR
Performance |
| Timeline |
| Valero Energy |
| Eneos Holdings ADR |
Valero Energy and Eneos Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valero Energy and Eneos Holdings
The main advantage of trading using opposite Valero Energy and Eneos Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valero Energy position performs unexpectedly, Eneos Holdings 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 Eneos Holdings will offset losses from the drop in Eneos Holdings' long position.| Valero Energy vs. Phillips 66 | Valero Energy vs. HF Sinclair Corp | Valero Energy vs. PBF Energy | Valero Energy vs. CVR Energy |
| Eneos Holdings vs. Idemitsu Kosan CoLtd | Eneos Holdings vs. HF Sinclair Corp | Eneos Holdings vs. Idemitsu Kosan Co | Eneos Holdings vs. PBF 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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