Correlation Between HF Sinclair and Fomento Economico
Can any of the company-specific risk be diversified away by investing in both HF Sinclair and Fomento Economico 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 Fomento Economico 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 Fomento Economico Mexicano, you can compare the effects of market volatilities on HF Sinclair and Fomento Economico 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 Fomento Economico. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF Sinclair and Fomento Economico.
Diversification Opportunities for HF Sinclair and Fomento Economico
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DINO and Fomento is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding HF Sinclair Corp and Fomento Economico Mexicano in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fomento Economico 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 Fomento Economico. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fomento Economico has no effect on the direction of HF Sinclair i.e., HF Sinclair and Fomento Economico go up and down completely randomly.
Pair Corralation between HF Sinclair and Fomento Economico
Given the investment horizon of 90 days HF Sinclair Corp is expected to generate 1.36 times more return on investment than Fomento Economico. However, HF Sinclair is 1.36 times more volatile than Fomento Economico Mexicano. It trades about -0.09 of its potential returns per unit of risk. Fomento Economico Mexicano is currently generating about -0.12 per unit of risk. If you would invest 5,251 in HF Sinclair Corp on September 3, 2024 and sell it today you would lose (1,158) from holding HF Sinclair Corp or give up 22.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HF Sinclair Corp vs. Fomento Economico Mexicano
Performance |
| Timeline |
| HF Sinclair Corp |
| Fomento Economico |
HF Sinclair and Fomento Economico Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HF Sinclair and Fomento Economico
The main advantage of trading using opposite HF Sinclair and Fomento Economico positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HF Sinclair position performs unexpectedly, Fomento Economico 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 Fomento Economico will offset losses from the drop in Fomento Economico's long position.| HF Sinclair vs. Delek Energy | HF Sinclair vs. CVR Energy | HF Sinclair vs. Valero Energy | HF Sinclair vs. Marathon Petroleum Corp |
| Fomento Economico vs. Ambev SA ADR | Fomento Economico vs. Boston Beer | Fomento Economico vs. Carlsberg AS | Fomento Economico vs. Molson Coors Brewing |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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