Correlation Between HF Sinclair and KEYBANK

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

Diversification Opportunities for HF Sinclair and KEYBANK

0.01

Correlation Coefficient

HF Sinclair  KEYBANK

Significant diversification

The 3 months correlation between DINO and KEYBANK is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding HF Sinclair Corp and KEYBANK NATL ASSN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEYBANK NATL ASSN 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 KEYBANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KEYBANK NATL ASSN has no effect on the direction of HF Sinclair i.e., HF Sinclair and KEYBANK go up and down completely randomly.

Pair Corralation between HF Sinclair and KEYBANK

Given the investment horizon of 90 days HF Sinclair Corp is expected to generate 0.7 times more return on investment than KEYBANK. However, HF Sinclair Corp is 1.43 times less risky than KEYBANK. It trades about -0.39 of its potential returns per unit of risk. KEYBANK NATL ASSN is currently generating about -0.39 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 (494.00) from holding HF Sinclair Corp or give up 12.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	50.0%
Values	Daily Returns

HF Sinclair Corp  vs.  KEYBANK NATL ASSN

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.

KEYBANK NATL ASSN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KEYBANK NATL ASSN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for KEYBANK NATL ASSN investors.

Pair Trading with HF Sinclair and KEYBANK

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

The idea behind HF Sinclair Corp and KEYBANK NATL ASSN 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.