Correlation Between Par Pacific and Star Gas
Can any of the company-specific risk be diversified away by investing in both Par Pacific and Star Gas 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 Par Pacific and Star Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Par Pacific Holdings and Star Gas Partners, you can compare the effects of market volatilities on Par Pacific and Star Gas 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 Par Pacific with a short position of Star Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Par Pacific and Star Gas.
Diversification Opportunities for Par Pacific and Star Gas
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Par and Star is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Par Pacific Holdings and Star Gas Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Gas Partners and Par Pacific 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 Par Pacific Holdings are associated (or correlated) with Star Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Gas Partners has no effect on the direction of Par Pacific i.e., Par Pacific and Star Gas go up and down completely randomly.
Pair Corralation between Par Pacific and Star Gas
Given the investment horizon of 90 days Par Pacific Holdings is expected to generate 3.11 times more return on investment than Star Gas. However, Par Pacific is 3.11 times more volatile than Star Gas Partners. It trades about 0.28 of its potential returns per unit of risk. Star Gas Partners is currently generating about -0.13 per unit of risk. If you would invest 1,426 in Par Pacific Holdings on March 29, 2025 and sell it today you would earn a total of 1,229 from holding Par Pacific Holdings or generate 86.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Par Pacific Holdings vs. Star Gas Partners
Performance |
| Timeline |
| Par Pacific Holdings |
| Star Gas Partners |
Par Pacific and Star Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Par Pacific and Star Gas
The main advantage of trading using opposite Par Pacific and Star Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Par Pacific position performs unexpectedly, Star Gas 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 Star Gas will offset losses from the drop in Star Gas' long position.| Par Pacific vs. Delek Logistics Partners | Par Pacific vs. CVR Energy | Par Pacific vs. PBF Energy | Par Pacific vs. HF Sinclair Corp |
| Star Gas vs. Ultrapar Participacoes SA | Star Gas vs. Par Pacific Holdings | Star Gas vs. Delek Energy | Star Gas vs. Crossamerica Partners 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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