Correlation Between HF Sinclair and NexGen Energy
Can any of the company-specific risk be diversified away by investing in both HF Sinclair and NexGen Energy 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 NexGen Energy 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 NexGen Energy, you can compare the effects of market volatilities on HF Sinclair and NexGen Energy 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 NexGen Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF Sinclair and NexGen Energy.
Diversification Opportunities for HF Sinclair and NexGen Energy
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DINO and NexGen is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding HF Sinclair Corp and NexGen Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NexGen Energy 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 NexGen Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NexGen Energy has no effect on the direction of HF Sinclair i.e., HF Sinclair and NexGen Energy go up and down completely randomly.
Pair Corralation between HF Sinclair and NexGen Energy
Given the investment horizon of 90 days HF Sinclair is expected to generate 83.35 times less return on investment than NexGen Energy. But when comparing it to its historical volatility, HF Sinclair Corp is 1.46 times less risky than NexGen Energy. It trades about 0.0 of its potential returns per unit of risk. NexGen Energy is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 405.00 in NexGen Energy on August 30, 2024 and sell it today you would earn a total of 426.00 from holding NexGen Energy or generate 105.19% 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. NexGen Energy
Performance |
| Timeline |
| HF Sinclair Corp |
| NexGen Energy |
HF Sinclair and NexGen Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HF Sinclair and NexGen Energy
The main advantage of trading using opposite HF Sinclair and NexGen Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HF Sinclair position performs unexpectedly, NexGen Energy 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 NexGen Energy will offset losses from the drop in NexGen Energy's long position.| HF Sinclair vs. Delek Energy | HF Sinclair vs. Crossamerica Partners LP | HF Sinclair vs. Par Pacific Holdings | HF Sinclair vs. Valvoline |
| NexGen Energy vs. Energy Fuels | NexGen Energy vs. Uranium Energy Corp | NexGen Energy vs. Cameco Corp | NexGen Energy vs. Ur Energy |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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