Correlation Between HF Sinclair and MARRIOTT

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

Diversification Opportunities for HF Sinclair and MARRIOTT

0.56

Correlation Coefficient

HF Sinclair  MARRIOTT

Very weak diversification

The 3 months correlation between DINO and MARRIOTT is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding HF Sinclair Corp and MARRIOTT INTL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MARRIOTT INTL INC 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 MARRIOTT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MARRIOTT INTL INC has no effect on the direction of HF Sinclair i.e., HF Sinclair and MARRIOTT go up and down completely randomly.

Pair Corralation between HF Sinclair and MARRIOTT

Given the investment horizon of 90 days HF Sinclair Corp is expected to under-perform the MARRIOTT. In addition to that, HF Sinclair is 3.89 times more volatile than MARRIOTT INTL INC. It trades about -0.15 of its total potential returns per unit of risk. MARRIOTT INTL INC is currently generating about -0.13 per unit of volatility. If you would invest  9,935  in MARRIOTT INTL INC on October 6, 2024 and sell it today you would lose (239.00) from holding MARRIOTT INTL INC or give up 2.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.12%
Values	Daily Returns

HF Sinclair Corp  vs.  MARRIOTT INTL INC

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.

MARRIOTT INTL INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MARRIOTT INTL INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, MARRIOTT is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with HF Sinclair and MARRIOTT

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

The idea behind HF Sinclair Corp and MARRIOTT INTL INC 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.