Correlation Between HF Sinclair and NETGEAR
Can any of the company-specific risk be diversified away by investing in both HF Sinclair and NETGEAR 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 NETGEAR 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 NETGEAR, you can compare the effects of market volatilities on HF Sinclair and NETGEAR 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 NETGEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF Sinclair and NETGEAR.
Diversification Opportunities for HF Sinclair and NETGEAR
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between DINO and NETGEAR is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding HF Sinclair Corp and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR 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 NETGEAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NETGEAR has no effect on the direction of HF Sinclair i.e., HF Sinclair and NETGEAR go up and down completely randomly.
Pair Corralation between HF Sinclair and NETGEAR
Given the investment horizon of 90 days HF Sinclair Corp is expected to under-perform the NETGEAR. But the stock apears to be less risky and, when comparing its historical volatility, HF Sinclair Corp is 1.56 times less risky than NETGEAR. The stock trades about -0.34 of its potential returns per unit of risk. The NETGEAR is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 2,378 in NETGEAR on September 14, 2024 and sell it today you would earn a total of 160.00 from holding NETGEAR or generate 6.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HF Sinclair Corp vs. NETGEAR
Performance |
| Timeline |
| HF Sinclair Corp |
| NETGEAR |
HF Sinclair and NETGEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HF Sinclair and NETGEAR
The main advantage of trading using opposite HF Sinclair and NETGEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HF Sinclair position performs unexpectedly, NETGEAR 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 NETGEAR will offset losses from the drop in NETGEAR's long position.| HF Sinclair vs. Delek Energy | HF Sinclair vs. Crossamerica Partners LP | HF Sinclair vs. Par Pacific Holdings | HF Sinclair vs. Valvoline |
| NETGEAR vs. Passage Bio | NETGEAR vs. Black Diamond Therapeutics | NETGEAR vs. Alector | NETGEAR vs. Century Therapeutics |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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