Correlation Between Energy Transfer and Holly Energy

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

By analyzing existing cross correlation between Energy Transfer LP and Holly Energy Partners, you can compare the effects of market volatilities on Energy Transfer and Holly 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 Energy Transfer with a short position of Holly Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Transfer and Holly Energy.

Diversification Opportunities for Energy Transfer and Holly Energy

0.0

Correlation Coefficient

Energy Transfer  Holly Energy

Pay attention - limited upside

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

Pair Corralation between Energy Transfer and Holly Energy

If you would invest  1,657  in Energy Transfer LP on May 7, 2025 and sell it today you would earn a total of  122.00  from holding Energy Transfer LP or generate 7.36% return on investment over 90 days.

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

Energy Transfer LP  vs.  Holly Energy Partners

Energy Transfer LP

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Energy Transfer LP are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Energy Transfer may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Holly Energy Partners

Risk-Adjusted Performance

Weakest

Over the last 90 days Holly Energy Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Holly Energy is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Energy Transfer and Holly Energy

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

The idea behind Energy Transfer LP and Holly Energy Partners 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.