Correlation Between HF SINCLAIR and Walmart

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

Diversification Opportunities for HF SINCLAIR and Walmart

-0.49

Correlation Coefficient

HF SINCLAIR  Walmart

Very good diversification

The 3 months correlation between HL80 and Walmart is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding HF SINCLAIR P and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart 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 Walmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walmart has no effect on the direction of HF SINCLAIR i.e., HF SINCLAIR and Walmart go up and down completely randomly.

Pair Corralation between HF SINCLAIR and Walmart

Assuming the 90 days trading horizon HF SINCLAIR P is expected to under-perform the Walmart. In addition to that, HF SINCLAIR is 1.65 times more volatile than Walmart. It trades about -0.08 of its total potential returns per unit of risk. Walmart is currently generating about 0.3 per unit of volatility. If you would invest  7,194  in Walmart on September 15, 2024 and sell it today you would earn a total of  1,825  from holding Walmart or generate 25.37% return on investment over 90 days.

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

HF SINCLAIR P  vs.  Walmart

HF SINCLAIR P

Risk-Adjusted Performance

0 of 100

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.

Walmart

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Walmart unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HF SINCLAIR and Walmart

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

The idea behind HF SINCLAIR P and Walmart 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..