Correlation Between Phillips and Ampol

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

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

Diversification Opportunities for Phillips and Ampol

0.0

Correlation Coefficient

Phillips  Ampol

Pay attention - limited upside

The 3 months correlation between Phillips and Ampol is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Phillips 66 and Ampol Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ampol Limited 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 Ampol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ampol Limited has no effect on the direction of Phillips i.e., Phillips and Ampol go up and down completely randomly.

Pair Corralation between Phillips and Ampol

If you would invest  11,099  in Phillips 66 on December 28, 2024 and sell it today you would earn a total of  1,077  from holding Phillips 66 or generate 9.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Phillips 66  vs.  Ampol Limited

Phillips 66

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Phillips 66 are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Phillips may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Ampol Limited

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Phillips and Ampol

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

The idea behind Phillips 66 and Ampol Limited 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.