Correlation Between Select Energy and Par Pacific
Can any of the company-specific risk be diversified away by investing in both Select Energy and Par Pacific 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 Select Energy and Par Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Select Energy Services and Par Pacific Holdings, you can compare the effects of market volatilities on Select Energy and Par Pacific 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 Select Energy with a short position of Par Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select Energy and Par Pacific.
Diversification Opportunities for Select Energy and Par Pacific
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Select and Par is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Select Energy Services and Par Pacific Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Par Pacific Holdings and Select 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 Select Energy Services are associated (or correlated) with Par Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Par Pacific Holdings has no effect on the direction of Select Energy i.e., Select Energy and Par Pacific go up and down completely randomly.
Pair Corralation between Select Energy and Par Pacific
Given the investment horizon of 90 days Select Energy Services is expected to generate 1.08 times more return on investment than Par Pacific. However, Select Energy is 1.08 times more volatile than Par Pacific Holdings. It trades about 0.06 of its potential returns per unit of risk. Par Pacific Holdings is currently generating about -0.02 per unit of risk. If you would invest 802.00 in Select Energy Services on August 27, 2024 and sell it today you would earn a total of 667.00 from holding Select Energy Services or generate 83.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Select Energy Services vs. Par Pacific Holdings
Performance |
| Timeline |
| Select Energy Services |
| Par Pacific Holdings |
Select Energy and Par Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Select Energy and Par Pacific
The main advantage of trading using opposite Select Energy and Par Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Select Energy position performs unexpectedly, Par Pacific 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 Par Pacific will offset losses from the drop in Par Pacific's long position.| Select Energy vs. ProPetro Holding Corp | Select Energy vs. RPC Inc | Select Energy vs. MRC Global | Select Energy vs. Expro Group Holdings |
| Par Pacific vs. Delek Logistics Partners | Par Pacific vs. CVR Energy | Par Pacific vs. PBF Energy | Par Pacific vs. HF Sinclair Corp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |