Correlation Between Park Hotels and HF SINCLAIR

Can any of the company-specific risk be diversified away by investing in both Park Hotels and HF SINCLAIR 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 Park Hotels and HF SINCLAIR into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Park Hotels Resorts and HF SINCLAIR P, you can compare the effects of market volatilities on Park Hotels and HF SINCLAIR 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 Park Hotels with a short position of HF SINCLAIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Hotels and HF SINCLAIR.

Diversification Opportunities for Park Hotels and HF SINCLAIR

0.69

Correlation Coefficient

Park Hotels  HF SINCLAIR

Poor diversification

The 3 months correlation between Park and HL80 is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and HF SINCLAIR P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HF SINCLAIR P and Park Hotels 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 Park Hotels Resorts are associated (or correlated) with HF SINCLAIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HF SINCLAIR P has no effect on the direction of Park Hotels i.e., Park Hotels and HF SINCLAIR go up and down completely randomly.

Pair Corralation between Park Hotels and HF SINCLAIR

Assuming the 90 days horizon Park Hotels Resorts is expected to under-perform the HF SINCLAIR. But the stock apears to be less risky and, when comparing its historical volatility, Park Hotels Resorts is 1.4 times less risky than HF SINCLAIR. The stock trades about -0.21 of its potential returns per unit of risk. The HF SINCLAIR P is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  3,188  in HF SINCLAIR P on December 28, 2024 and sell it today you would lose (108.00) from holding HF SINCLAIR P or give up 3.39% of portfolio value over 90 days.

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

Park Hotels Resorts  vs.  HF SINCLAIR P

Park Hotels Resorts

Risk-Adjusted Performance

Very Weak

Over the last 90 days Park Hotels Resorts has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

HF SINCLAIR P

Risk-Adjusted Performance

Very Weak

Over the last 90 days HF SINCLAIR P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, HF SINCLAIR is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Park Hotels and HF SINCLAIR

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

The idea behind Park Hotels Resorts and HF SINCLAIR P 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.

Check out your portfolio center.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.