Correlation Between Tesoro and Valero Energy
Can any of the company-specific risk be diversified away by investing in both Tesoro 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 Tesoro and Valero Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tesoro and Valero Energy, you can compare the effects of market volatilities on Tesoro 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 Tesoro with a short position of Valero Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesoro and Valero Energy.
Diversification Opportunities for Tesoro and Valero Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tesoro and Valero is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tesoro and Valero Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valero Energy and Tesoro 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 Tesoro 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 Tesoro i.e., Tesoro and Valero Energy go up and down completely randomly.
Pair Corralation between Tesoro and Valero Energy
If you would invest 16,739 in Valero Energy on January 19, 2024 and sell it today you would lose (11.00) from holding Valero Energy or give up 0.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Tesoro vs. Valero Energy
Performance |
| Timeline |
| Tesoro |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Valero Energy |
Tesoro and Valero Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tesoro and Valero Energy
The main advantage of trading using opposite Tesoro and Valero Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesoro 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.The idea behind Tesoro and Valero Energy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Valero Energy vs. Clean Energy Fuels | Valero Energy vs. Icahn Enterprises LP | Valero Energy vs. Delek Logistics Partners | Valero Energy vs. Adams Resources 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |