Correlation Between HF Sinclair and Cosan SA
Can any of the company-specific risk be diversified away by investing in both HF Sinclair and Cosan SA 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 Cosan SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HF Sinclair Corp and Cosan SA ADR, you can compare the effects of market volatilities on HF Sinclair and Cosan SA 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 Cosan SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF Sinclair and Cosan SA.
Diversification Opportunities for HF Sinclair and Cosan SA
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between DINO and Cosan is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding HF Sinclair Corp and Cosan SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosan SA ADR 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 Corp are associated (or correlated) with Cosan SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cosan SA ADR has no effect on the direction of HF Sinclair i.e., HF Sinclair and Cosan SA go up and down completely randomly.
Pair Corralation between HF Sinclair and Cosan SA
Given the investment horizon of 90 days HF Sinclair Corp is expected to generate 0.96 times more return on investment than Cosan SA. However, HF Sinclair Corp is 1.04 times less risky than Cosan SA. It trades about -0.06 of its potential returns per unit of risk. Cosan SA ADR is currently generating about -0.21 per unit of risk. If you would invest 4,353 in HF Sinclair Corp on August 23, 2024 and sell it today you would lose (150.00) from holding HF Sinclair Corp or give up 3.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HF Sinclair Corp vs. Cosan SA ADR
Performance |
| Timeline |
| HF Sinclair Corp |
| Cosan SA ADR |
HF Sinclair and Cosan SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HF Sinclair and Cosan SA
The main advantage of trading using opposite HF Sinclair and Cosan SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HF Sinclair position performs unexpectedly, Cosan SA 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 Cosan SA will offset losses from the drop in Cosan SA's long position.| HF Sinclair vs. Delek Energy | HF Sinclair vs. CVR Energy | HF Sinclair vs. Valero Energy | HF Sinclair vs. Marathon Petroleum Corp |
| Cosan SA vs. Delek Energy | Cosan SA vs. Crossamerica Partners LP | Cosan SA vs. Par Pacific Holdings | Cosan SA vs. Valvoline |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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