Correlation Between HF Sinclair and Cheer Holding

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

Diversification Opportunities for HF Sinclair and Cheer Holding

0.54

Correlation Coefficient

HF Sinclair  Cheer Holding

Very weak diversification

The 3 months correlation between DINO and Cheer is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding HF Sinclair Corp and Cheer Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheer Holding 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 Cheer Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheer Holding has no effect on the direction of HF Sinclair i.e., HF Sinclair and Cheer Holding go up and down completely randomly.

Pair Corralation between HF Sinclair and Cheer Holding

Given the investment horizon of 90 days HF Sinclair Corp is expected to generate 0.68 times more return on investment than Cheer Holding. However, HF Sinclair Corp is 1.47 times less risky than Cheer Holding. It trades about -0.33 of its potential returns per unit of risk. Cheer Holding is currently generating about -0.46 per unit of risk. If you would invest  3,930  in HF Sinclair Corp on October 10, 2024 and sell it today you would lose (453.00) from holding HF Sinclair Corp or give up 11.53% of portfolio value over 90 days.

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

HF Sinclair Corp  vs.  Cheer Holding

HF Sinclair Corp

Risk-Adjusted Performance

0 of 100

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 February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Cheer Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cheer Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's technical indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with HF Sinclair and Cheer Holding

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

The idea behind HF Sinclair Corp and Cheer Holding 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.