Correlation Between Phillips and ENEOS Holdings

Can any of the company-specific risk be diversified away by investing in both Phillips and ENEOS Holdings 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 ENEOS Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Phillips 66 and ENEOS Holdings, you can compare the effects of market volatilities on Phillips and ENEOS Holdings 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 ENEOS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phillips and ENEOS Holdings.

Diversification Opportunities for Phillips and ENEOS Holdings

0.33

Correlation Coefficient

Phillips  ENEOS Holdings

Weak diversification

The 3 months correlation between Phillips and ENEOS is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Phillips 66 and ENEOS Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENEOS Holdings 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 ENEOS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENEOS Holdings has no effect on the direction of Phillips i.e., Phillips and ENEOS Holdings go up and down completely randomly.

Pair Corralation between Phillips and ENEOS Holdings

Assuming the 90 days horizon Phillips 66 is expected to generate 1.59 times more return on investment than ENEOS Holdings. However, Phillips is 1.59 times more volatile than ENEOS Holdings. It trades about 0.14 of its potential returns per unit of risk. ENEOS Holdings is currently generating about 0.01 per unit of risk. If you would invest  8,973  in Phillips 66 on April 23, 2025 and sell it today you would earn a total of  1,781  from holding Phillips 66 or generate 19.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Phillips 66  vs.  ENEOS Holdings

Phillips 66

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Phillips 66 are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Phillips reported solid returns over the last few months and may actually be approaching a breakup point.

ENEOS Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days ENEOS Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ENEOS Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Phillips and ENEOS Holdings

The main advantage of trading using opposite Phillips and ENEOS Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phillips position performs unexpectedly, ENEOS Holdings 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 ENEOS Holdings will offset losses from the drop in ENEOS Holdings' long position.

The idea behind Phillips 66 and ENEOS Holdings 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.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.