Correlation Between HF Sinclair and Constellation Brands
Can any of the company-specific risk be diversified away by investing in both HF Sinclair and Constellation Brands 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 Constellation Brands 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 Constellation Brands Class, you can compare the effects of market volatilities on HF Sinclair and Constellation Brands 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 Constellation Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF Sinclair and Constellation Brands.
Diversification Opportunities for HF Sinclair and Constellation Brands
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DINO and Constellation is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding HF Sinclair Corp and Constellation Brands Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Constellation Brands 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 Constellation Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Constellation Brands has no effect on the direction of HF Sinclair i.e., HF Sinclair and Constellation Brands go up and down completely randomly.
Pair Corralation between HF Sinclair and Constellation Brands
Given the investment horizon of 90 days HF Sinclair Corp is expected to under-perform the Constellation Brands. In addition to that, HF Sinclair is 1.64 times more volatile than Constellation Brands Class. It trades about -0.02 of its total potential returns per unit of risk. Constellation Brands Class is currently generating about 0.01 per unit of volatility. If you would invest 22,480 in Constellation Brands Class on September 20, 2024 and sell it today you would earn a total of 225.00 from holding Constellation Brands Class or generate 1.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HF Sinclair Corp vs. Constellation Brands Class
Performance |
| Timeline |
| HF Sinclair Corp |
| Constellation Brands |
HF Sinclair and Constellation Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HF Sinclair and Constellation Brands
The main advantage of trading using opposite HF Sinclair and Constellation Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HF Sinclair position performs unexpectedly, Constellation Brands 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 Constellation Brands will offset losses from the drop in Constellation Brands' long position.| HF Sinclair vs. Delek Energy | HF Sinclair vs. CVR Energy | HF Sinclair vs. Valero Energy | HF Sinclair vs. Marathon Petroleum Corp |
| Constellation Brands vs. Brown Forman | Constellation Brands vs. Duckhorn Portfolio | Constellation Brands vs. MGP Ingredients | Constellation Brands vs. Brown Forman |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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