Correlation Between HF Sinclair and Collective Mining

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

Diversification Opportunities for HF Sinclair and Collective Mining

-0.37

Correlation Coefficient

HF Sinclair  Collective Mining

Very good diversification

The 3 months correlation between DINO and Collective is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding HF Sinclair Corp and Collective Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collective Mining 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 Collective Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collective Mining has no effect on the direction of HF Sinclair i.e., HF Sinclair and Collective Mining go up and down completely randomly.

Pair Corralation between HF Sinclair and Collective Mining

Given the investment horizon of 90 days HF Sinclair Corp is expected to under-perform the Collective Mining. But the stock apears to be less risky and, when comparing its historical volatility, HF Sinclair Corp is 1.63 times less risky than Collective Mining. The stock trades about 0.0 of its potential returns per unit of risk. The Collective Mining is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  410.00  in Collective Mining on December 29, 2024 and sell it today you would earn a total of  442.00  from holding Collective Mining or generate 107.8% return on investment over 90 days.

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

HF Sinclair Corp  vs.  Collective Mining

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.

Collective Mining

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Collective Mining are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Collective Mining disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HF Sinclair and Collective Mining

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

The idea behind HF Sinclair Corp and Collective Mining 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.