Correlation Between Phillips and Devon Energy
Can any of the company-specific risk be diversified away by investing in both Phillips and Devon 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 Phillips and Devon Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phillips 66 and Devon Energy, you can compare the effects of market volatilities on Phillips and Devon 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 Phillips with a short position of Devon Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phillips and Devon Energy.
Diversification Opportunities for Phillips and Devon Energy
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Phillips and Devon is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Phillips 66 and Devon Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Devon Energy 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 Devon Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Devon Energy has no effect on the direction of Phillips i.e., Phillips and Devon Energy go up and down completely randomly.
Pair Corralation between Phillips and Devon Energy
Considering the 90-day investment horizon Phillips 66 is expected to generate 0.83 times more return on investment than Devon Energy. However, Phillips 66 is 1.21 times less risky than Devon Energy. It trades about 0.14 of its potential returns per unit of risk. Devon Energy is currently generating about 0.07 per unit of risk. If you would invest 11,497 in Phillips 66 on June 7, 2025 and sell it today you would earn a total of 1,659 from holding Phillips 66 or generate 14.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phillips 66 vs. Devon Energy
Performance |
| Timeline |
| Phillips 66 |
| Devon Energy |
Phillips and Devon Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phillips and Devon Energy
The main advantage of trading using opposite Phillips and Devon Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phillips position performs unexpectedly, Devon 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 Devon Energy will offset losses from the drop in Devon Energy's long position.| Phillips vs. Marathon Petroleum Corp | Phillips vs. HF Sinclair Corp | Phillips vs. PBF Energy | Phillips vs. Sunoco LP |
| Devon Energy vs. Coterra Energy | Devon Energy vs. Occidental Petroleum | Devon Energy vs. Diamondback Energy | Devon Energy vs. ConocoPhillips |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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