Correlation Between HF Sinclair and Chemours

Can any of the company-specific risk be diversified away by investing in both HF Sinclair and Chemours 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 Chemours 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 Chemours Co, you can compare the effects of market volatilities on HF Sinclair and Chemours 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 Chemours. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF Sinclair and Chemours.

Diversification Opportunities for HF Sinclair and Chemours

0.75

Correlation Coefficient

HF Sinclair  Chemours

Poor diversification

The 3 months correlation between DINO and Chemours is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding HF Sinclair Corp and Chemours Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemours 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 Chemours. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chemours has no effect on the direction of HF Sinclair i.e., HF Sinclair and Chemours go up and down completely randomly.

Pair Corralation between HF Sinclair and Chemours

Given the investment horizon of 90 days HF Sinclair Corp is expected to generate 0.8 times more return on investment than Chemours. However, HF Sinclair Corp is 1.24 times less risky than Chemours. It trades about 0.01 of its potential returns per unit of risk. Chemours Co is currently generating about -0.08 per unit of risk. If you would invest  3,368  in HF Sinclair Corp on December 27, 2024 and sell it today you would lose (13.00) from holding HF Sinclair Corp or give up 0.39% of portfolio value over 90 days.

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

HF Sinclair Corp  vs.  Chemours Co

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 very healthy basic indicators, HF Sinclair is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Chemours

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chemours Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with HF Sinclair and Chemours

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

The idea behind HF Sinclair Corp and Chemours Co 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.