Correlation Between HF Sinclair and Ecovyst

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

Diversification Opportunities for HF Sinclair and Ecovyst

0.81

Correlation Coefficient

HF Sinclair  Ecovyst

Very poor diversification

The 3 months correlation between DINO and Ecovyst is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding HF Sinclair Corp and Ecovyst in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecovyst 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 Ecovyst. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecovyst has no effect on the direction of HF Sinclair i.e., HF Sinclair and Ecovyst go up and down completely randomly.

Pair Corralation between HF Sinclair and Ecovyst

Given the investment horizon of 90 days HF Sinclair Corp is expected to generate 0.93 times more return on investment than Ecovyst. However, HF Sinclair Corp is 1.08 times less risky than Ecovyst. It trades about 0.0 of its potential returns per unit of risk. Ecovyst is currently generating about -0.07 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 (41.00) from holding HF Sinclair Corp or give up 1.22% of portfolio value over 90 days.

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

HF Sinclair Corp  vs.  Ecovyst

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.

Ecovyst

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ecovyst has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with HF Sinclair and Ecovyst

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

The idea behind HF Sinclair Corp and Ecovyst 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.