Correlation Between World Fuel and Par Pacific
Can any of the company-specific risk be diversified away by investing in both World Fuel 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 World Fuel and Par Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between World Fuel Services and Par Pacific Holdings, you can compare the effects of market volatilities on World Fuel 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 World Fuel with a short position of Par Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of World Fuel and Par Pacific.
Diversification Opportunities for World Fuel and Par Pacific
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between World and Par is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding World Fuel 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 World Fuel 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 World Fuel 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 World Fuel i.e., World Fuel and Par Pacific go up and down completely randomly.
Pair Corralation between World Fuel and Par Pacific
If you would invest 2,195 in World Fuel Services on January 24, 2024 and sell it today you would earn a total of 0.00 from holding World Fuel Services or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 1.61% |
Values | Daily Returns |
World Fuel Services vs. Par Pacific Holdings
Performance |
Timeline |
World Fuel Services |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Par Pacific Holdings |
World Fuel and Par Pacific Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with World Fuel and Par Pacific
The main advantage of trading using opposite World Fuel and Par Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Fuel 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.World Fuel vs. Delek Logistics Partners | World Fuel vs. Star Gas Partners | World Fuel vs. Delek Energy | World Fuel vs. Par Pacific Holdings |
Par Pacific vs. Delek Logistics Partners | Par Pacific vs. Crossamerica Partners LP | Par Pacific 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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