Correlation Between Biglari Holdings and HF Sinclair
Can any of the company-specific risk be diversified away by investing in both Biglari Holdings 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 Biglari Holdings and HF Sinclair into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biglari Holdings and HF Sinclair Corp, you can compare the effects of market volatilities on Biglari Holdings 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 Biglari Holdings with a short position of HF Sinclair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and HF Sinclair.
Diversification Opportunities for Biglari Holdings and HF Sinclair
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Biglari and DINO is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and HF Sinclair Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HF Sinclair Corp and Biglari Holdings 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 Biglari Holdings 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 Corp has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and HF Sinclair go up and down completely randomly.
Pair Corralation between Biglari Holdings and HF Sinclair
Allowing for the 90-day total investment horizon Biglari Holdings is expected to generate 1.77 times more return on investment than HF Sinclair. However, Biglari Holdings is 1.77 times more volatile than HF Sinclair Corp. It trades about 0.36 of its potential returns per unit of risk. HF Sinclair Corp is currently generating about 0.22 per unit of risk. If you would invest 17,300 in Biglari Holdings on September 4, 2024 and sell it today you would earn a total of 4,304 from holding Biglari Holdings or generate 24.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biglari Holdings vs. HF Sinclair Corp
Performance |
| Timeline |
| Biglari Holdings |
| HF Sinclair Corp |
Biglari Holdings and HF Sinclair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biglari Holdings and HF Sinclair
The main advantage of trading using opposite Biglari Holdings and HF Sinclair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings 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.| Biglari Holdings vs. Hyatt Hotels | Biglari Holdings vs. Smart Share Global | Biglari Holdings vs. Sweetgreen | Biglari Holdings vs. Wyndham Hotels Resorts |
| HF Sinclair vs. Delek Energy | HF Sinclair vs. CVR Energy | HF Sinclair vs. Valero Energy | HF Sinclair vs. Marathon Petroleum Corp |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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