Correlation Between Frontera Energy and Par Pacific

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

By analyzing existing cross correlation between Frontera Energy Corp and Par Pacific Holdings, you can compare the effects of market volatilities on Frontera Energy and Par Pacific 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 Frontera Energy with a short position of Par Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frontera Energy and Par Pacific.

Diversification Opportunities for Frontera Energy and Par Pacific

-0.4

Correlation Coefficient

Frontera Energy  Par Pacific

Very good diversification

The 3 months correlation between Frontera and Par is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Frontera Energy Corp and Par Pacific Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Par Pacific Holdings and Frontera Energy 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 Frontera Energy Corp are associated (or correlated) with Par Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Par Pacific Holdings has no effect on the direction of Frontera Energy i.e., Frontera Energy and Par Pacific go up and down completely randomly.

Pair Corralation between Frontera Energy and Par Pacific

Assuming the 90 days horizon Frontera Energy is expected to generate 6.31 times less return on investment than Par Pacific. But when comparing it to its historical volatility, Frontera Energy Corp is 1.36 times less risky than Par Pacific. It trades about 0.05 of its potential returns per unit of risk. Par Pacific Holdings is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  1,365  in Par Pacific Holdings on July 9, 2025 and sell it today you would earn a total of  2,159  from holding Par Pacific Holdings or generate 158.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Frontera Energy Corp  vs.  Par Pacific Holdings

Frontera Energy Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days Frontera Energy Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in November 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Par Pacific Holdings

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Par Pacific Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Par Pacific may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Frontera Energy and Par Pacific

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

The idea behind Frontera Energy Corp and Par Pacific 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.