Correlation Between HF Sinclair and Drilling Tools
Can any of the company-specific risk be diversified away by investing in both HF Sinclair and Drilling Tools 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 Drilling Tools 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 Drilling Tools International, you can compare the effects of market volatilities on HF Sinclair and Drilling Tools 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 Drilling Tools. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF Sinclair and Drilling Tools.
Diversification Opportunities for HF Sinclair and Drilling Tools
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between DINO and Drilling is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding HF Sinclair Corp and Drilling Tools International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Drilling Tools Inter 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 Drilling Tools. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Drilling Tools Inter has no effect on the direction of HF Sinclair i.e., HF Sinclair and Drilling Tools go up and down completely randomly.
Pair Corralation between HF Sinclair and Drilling Tools
Given the investment horizon of 90 days HF Sinclair is expected to generate 30.94 times less return on investment than Drilling Tools. But when comparing it to its historical volatility, HF Sinclair Corp is 1.04 times less risky than Drilling Tools. It trades about 0.0 of its potential returns per unit of risk. Drilling Tools International is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 330.00 in Drilling Tools International on August 28, 2024 and sell it today you would earn a total of 21.00 from holding Drilling Tools International or generate 6.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HF Sinclair Corp vs. Drilling Tools International
Performance |
| Timeline |
| HF Sinclair Corp |
| Drilling Tools Inter |
HF Sinclair and Drilling Tools Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HF Sinclair and Drilling Tools
The main advantage of trading using opposite HF Sinclair and Drilling Tools positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HF Sinclair position performs unexpectedly, Drilling Tools 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 Drilling Tools will offset losses from the drop in Drilling Tools' long position.| HF Sinclair vs. Delek Energy | HF Sinclair vs. CVR Energy | HF Sinclair vs. Valero Energy | HF Sinclair vs. Marathon Petroleum Corp |
| Drilling Tools vs. ProPetro Holding Corp | Drilling Tools vs. RPC Inc | Drilling Tools vs. MRC Global | Drilling Tools vs. Expro Group Holdings |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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