Correlation Between HF SINCLAIR and FORWARD AIR

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

Diversification Opportunities for HF SINCLAIR and FORWARD AIR

0.87

Correlation Coefficient

HF SINCLAIR  FORWARD AIR

Very poor diversification

The 3 months correlation between HL80 and FORWARD is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding HF SINCLAIR P and FORWARD AIR P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FORWARD AIR P 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 FORWARD AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FORWARD AIR P has no effect on the direction of HF SINCLAIR i.e., HF SINCLAIR and FORWARD AIR go up and down completely randomly.

Pair Corralation between HF SINCLAIR and FORWARD AIR

Assuming the 90 days trading horizon HF SINCLAIR P is expected to generate 0.7 times more return on investment than FORWARD AIR. However, HF SINCLAIR P is 1.44 times less risky than FORWARD AIR. It trades about -0.02 of its potential returns per unit of risk. FORWARD AIR P is currently generating about -0.15 per unit of risk. If you would invest  3,188  in HF SINCLAIR P on December 29, 2024 and sell it today you would lose (188.00) from holding HF SINCLAIR P or give up 5.9% of portfolio value over 90 days.

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

HF SINCLAIR P  vs.  FORWARD AIR P

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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

FORWARD AIR P

Risk-Adjusted Performance

Very Weak

Over the last 90 days FORWARD AIR P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile 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.

Pair Trading with HF SINCLAIR and FORWARD AIR

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

The idea behind HF SINCLAIR P and FORWARD AIR 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.

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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.