Correlation Between HF Sinclair and FactSet Research

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

Diversification Opportunities for HF Sinclair and FactSet Research

0.39

Correlation Coefficient

HF Sinclair  FactSet Research

Weak diversification

The 3 months correlation between DINO and FactSet is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding HF Sinclair Corp and FactSet Research Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FactSet Research Systems 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 FactSet Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FactSet Research Systems has no effect on the direction of HF Sinclair i.e., HF Sinclair and FactSet Research go up and down completely randomly.

Pair Corralation between HF Sinclair and FactSet Research

Given the investment horizon of 90 days HF Sinclair Corp is expected to generate 2.27 times more return on investment than FactSet Research. However, HF Sinclair is 2.27 times more volatile than FactSet Research Systems. It trades about 0.0 of its potential returns per unit of risk. FactSet Research Systems is currently generating about -0.11 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	Very Weak
Accuracy	100.0%
Values	Daily Returns

HF Sinclair Corp  vs.  FactSet Research Systems

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.

FactSet Research Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days FactSet Research Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental 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 FactSet Research

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

The idea behind HF Sinclair Corp and FactSet Research Systems 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.