Correlation Between HF SINCLAIR and SYSTEMAIR

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

By analyzing existing cross correlation between HF SINCLAIR P and SYSTEMAIR AB, you can compare the effects of market volatilities on HF SINCLAIR and SYSTEMAIR 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 SYSTEMAIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF SINCLAIR and SYSTEMAIR.

Diversification Opportunities for HF SINCLAIR and SYSTEMAIR

0.15

Correlation Coefficient

HF SINCLAIR  SYSTEMAIR

Average diversification

The 3 months correlation between HL80 and SYSTEMAIR is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding HF SINCLAIR P and SYSTEMAIR AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYSTEMAIR AB 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 P are associated (or correlated) with SYSTEMAIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SYSTEMAIR AB has no effect on the direction of HF SINCLAIR i.e., HF SINCLAIR and SYSTEMAIR go up and down completely randomly.

Pair Corralation between HF SINCLAIR and SYSTEMAIR

Assuming the 90 days trading horizon HF SINCLAIR P is expected to under-perform the SYSTEMAIR. But the stock apears to be less risky and, when comparing its historical volatility, HF SINCLAIR P is 1.15 times less risky than SYSTEMAIR. The stock trades about -0.06 of its potential returns per unit of risk. The SYSTEMAIR AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  737.00  in SYSTEMAIR AB on November 19, 2024 and sell it today you would earn a total of  35.00  from holding SYSTEMAIR AB or generate 4.75% return on investment over 90 days.

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

HF SINCLAIR P  vs.  SYSTEMAIR AB

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 latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

SYSTEMAIR AB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SYSTEMAIR AB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, SYSTEMAIR may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with HF SINCLAIR and SYSTEMAIR

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

The idea behind HF SINCLAIR P and SYSTEMAIR AB 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.