Correlation Between HF Sinclair and 629377CH3

Can any of the company-specific risk be diversified away by investing in both HF Sinclair and 629377CH3 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 629377CH3 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 NRG Energy 525, you can compare the effects of market volatilities on HF Sinclair and 629377CH3 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 629377CH3. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF Sinclair and 629377CH3.

Diversification Opportunities for HF Sinclair and 629377CH3

0.42

Correlation Coefficient

HF Sinclair  629377CH3

Very weak diversification

The 3 months correlation between DINO and 629377CH3 is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding HF Sinclair Corp and NRG Energy 525 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NRG Energy 525 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 629377CH3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NRG Energy 525 has no effect on the direction of HF Sinclair i.e., HF Sinclair and 629377CH3 go up and down completely randomly.

Pair Corralation between HF Sinclair and 629377CH3

Given the investment horizon of 90 days HF Sinclair Corp is expected to under-perform the 629377CH3. In addition to that, HF Sinclair is 1.41 times more volatile than NRG Energy 525. It trades about -0.27 of its total potential returns per unit of risk. NRG Energy 525 is currently generating about -0.23 per unit of volatility. If you would invest  9,778  in NRG Energy 525 on December 10, 2024 and sell it today you would lose (908.00) from holding NRG Energy 525 or give up 9.29% of portfolio value over 90 days.

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

HF Sinclair Corp  vs.  NRG Energy 525

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 conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

NRG Energy 525

Risk-Adjusted Performance

Very Weak

Over the last 90 days NRG Energy 525 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for NRG Energy 525 investors.

Pair Trading with HF Sinclair and 629377CH3

The main advantage of trading using opposite HF Sinclair and 629377CH3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HF Sinclair position performs unexpectedly, 629377CH3 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 629377CH3 will offset losses from the drop in 629377CH3's long position.

The idea behind HF Sinclair Corp and NRG Energy 525 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 Anywhere module to track or share privately all of your investments from the convenience of any device.