Correlation Between Phillips and Essendant
Can any of the company-specific risk be diversified away by investing in both Phillips and Essendant 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 Essendant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phillips 66 and Essendant, you can compare the effects of market volatilities on Phillips and Essendant 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 Essendant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phillips and Essendant.
Diversification Opportunities for Phillips and Essendant
Pay attention - limited upside
The 3 months correlation between Phillips and Essendant is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Phillips 66 and Essendant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Essendant 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 Essendant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Essendant has no effect on the direction of Phillips i.e., Phillips and Essendant go up and down completely randomly.
Pair Corralation between Phillips and Essendant
If you would invest 8,315 in Phillips 66 on January 19, 2024 and sell it today you would earn a total of 7,126 from holding Phillips 66 or generate 85.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Phillips 66 vs. Essendant
Performance |
| Timeline |
| Phillips 66 |
| Essendant |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Phillips and Essendant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phillips and Essendant
The main advantage of trading using opposite Phillips and Essendant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phillips position performs unexpectedly, Essendant 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 Essendant will offset losses from the drop in Essendant's long position.| Phillips vs. Clean Energy Fuels | Phillips vs. Icahn Enterprises LP | Phillips vs. Delek Logistics Partners | Phillips vs. Adams Resources Energy |
| Essendant vs. Daily Journal Corp | Essendant vs. Sunlands Technology Group | Essendant vs. Youdao Inc | Essendant vs. SEI Investments |
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.
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