Correlation Between HF Sinclair and Ecovyst
Can any of the company-specific risk be diversified away by investing in both HF Sinclair and Ecovyst 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 Ecovyst 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 Ecovyst, you can compare the effects of market volatilities on HF Sinclair and Ecovyst 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 Ecovyst. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF Sinclair and Ecovyst.
Diversification Opportunities for HF Sinclair and Ecovyst
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DINO and Ecovyst is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding HF Sinclair Corp and Ecovyst in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecovyst 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 Ecovyst. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecovyst has no effect on the direction of HF Sinclair i.e., HF Sinclair and Ecovyst go up and down completely randomly.
Pair Corralation between HF Sinclair and Ecovyst
Given the investment horizon of 90 days HF Sinclair Corp is expected to under-perform the Ecovyst. But the stock apears to be less risky and, when comparing its historical volatility, HF Sinclair Corp is 1.37 times less risky than Ecovyst. The stock trades about -0.05 of its potential returns per unit of risk. The Ecovyst is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 975.00 in Ecovyst on September 14, 2024 and sell it today you would lose (227.00) from holding Ecovyst or give up 23.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HF Sinclair Corp vs. Ecovyst
Performance |
| Timeline |
| HF Sinclair Corp |
| Ecovyst |
HF Sinclair and Ecovyst Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HF Sinclair and Ecovyst
The main advantage of trading using opposite HF Sinclair and Ecovyst positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HF Sinclair position performs unexpectedly, Ecovyst 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 Ecovyst will offset losses from the drop in Ecovyst's long position.| HF Sinclair vs. Delek Energy | HF Sinclair vs. Crossamerica Partners LP | HF Sinclair vs. Par Pacific Holdings | HF Sinclair 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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