Correlation Between HF Sinclair and Software Acquisition
Can any of the company-specific risk be diversified away by investing in both HF Sinclair and Software Acquisition 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 Software Acquisition 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 Software Acquisition Group, you can compare the effects of market volatilities on HF Sinclair and Software Acquisition 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 Software Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF Sinclair and Software Acquisition.
Diversification Opportunities for HF Sinclair and Software Acquisition
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DINO and Software is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding HF Sinclair Corp and Software Acquisition Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Software Acquisition 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 Software Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Software Acquisition has no effect on the direction of HF Sinclair i.e., HF Sinclair and Software Acquisition go up and down completely randomly.
Pair Corralation between HF Sinclair and Software Acquisition
Given the investment horizon of 90 days HF Sinclair is expected to generate 5.39 times less return on investment than Software Acquisition. But when comparing it to its historical volatility, HF Sinclair Corp is 2.05 times less risky than Software Acquisition. It trades about 0.02 of its potential returns per unit of risk. Software Acquisition Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 103.00 in Software Acquisition Group on November 29, 2024 and sell it today you would earn a total of 4.00 from holding Software Acquisition Group or generate 3.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HF Sinclair Corp vs. Software Acquisition Group
Performance |
| Timeline |
| HF Sinclair Corp |
| Software Acquisition |
HF Sinclair and Software Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HF Sinclair and Software Acquisition
The main advantage of trading using opposite HF Sinclair and Software Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HF Sinclair position performs unexpectedly, Software Acquisition 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 Software Acquisition will offset losses from the drop in Software Acquisition's long position.| HF Sinclair vs. Delek Energy | HF Sinclair vs. CVR Energy | HF Sinclair vs. Valero Energy | HF Sinclair vs. Marathon Petroleum Corp |
| Software Acquisition vs. Paranovus Entertainment Technology | Software Acquisition vs. Ubisoft Entertainment | Software Acquisition vs. BRP Inc | Software Acquisition vs. Barings BDC |
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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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