Correlation Between HF Sinclair and PBF Energy
Can any of the company-specific risk be diversified away by investing in both HF Sinclair and PBF 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 PBF 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 PBF Energy, you can compare the effects of market volatilities on HF Sinclair and PBF 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 PBF Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF Sinclair and PBF Energy.
Diversification Opportunities for HF Sinclair and PBF Energy
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between DINO and PBF is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding HF Sinclair Corp and PBF Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PBF 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 PBF Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PBF Energy has no effect on the direction of HF Sinclair i.e., HF Sinclair and PBF Energy go up and down completely randomly.
Pair Corralation between HF Sinclair and PBF Energy
Given the investment horizon of 90 days HF Sinclair Corp is expected to under-perform the PBF Energy. But the stock apears to be less risky and, when comparing its historical volatility, HF Sinclair Corp is 1.18 times less risky than PBF Energy. The stock trades about -0.09 of its potential returns per unit of risk. The PBF Energy is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 3,390 in PBF Energy on August 23, 2024 and sell it today you would lose (175.00) from holding PBF Energy or give up 5.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HF Sinclair Corp vs. PBF Energy
Performance |
| Timeline |
| HF Sinclair Corp |
| PBF Energy |
HF Sinclair and PBF Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HF Sinclair and PBF Energy
The main advantage of trading using opposite HF Sinclair and PBF Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HF Sinclair position performs unexpectedly, PBF 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 PBF Energy will offset losses from the drop in PBF Energy's long position.| HF Sinclair vs. Delek Energy | HF Sinclair vs. CVR Energy | HF Sinclair vs. Valero Energy | HF Sinclair vs. Marathon Petroleum Corp |
| PBF Energy vs. Delek Energy | PBF Energy vs. CVR Energy | PBF Energy vs. Valero Energy | PBF Energy vs. Marathon Petroleum Corp |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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