Correlation Between HF Sinclair and Afya

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

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

Diversification Opportunities for HF Sinclair and Afya

0.4

Correlation Coefficient

HF Sinclair  Afya

Very weak diversification

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

Pair Corralation between HF Sinclair and Afya

Given the investment horizon of 90 days HF Sinclair Corp is expected to under-perform the Afya. But the stock apears to be less risky and, when comparing its historical volatility, HF Sinclair Corp is 1.1 times less risky than Afya. The stock trades about -0.02 of its potential returns per unit of risk. The Afya is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,085  in Afya on December 4, 2024 and sell it today you would earn a total of  555.50  from holding Afya or generate 51.2% return on investment over 90 days.

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

HF Sinclair Corp  vs.  Afya

HF Sinclair Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days HF Sinclair Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Afya

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Afya are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Afya is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with HF Sinclair and Afya

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

The idea behind HF Sinclair Corp and Afya 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.