Correlation Between HF Sinclair and Wendys
Can any of the company-specific risk be diversified away by investing in both HF Sinclair and Wendys 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 Wendys 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 The Wendys Co, you can compare the effects of market volatilities on HF Sinclair and Wendys 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 Wendys. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF Sinclair and Wendys.
Diversification Opportunities for HF Sinclair and Wendys
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between DINO and Wendys is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding HF Sinclair Corp and The Wendys Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Wendys 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 Wendys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Wendys has no effect on the direction of HF Sinclair i.e., HF Sinclair and Wendys go up and down completely randomly.
Pair Corralation between HF Sinclair and Wendys
Given the investment horizon of 90 days HF Sinclair Corp is expected to under-perform the Wendys. In addition to that, HF Sinclair is 1.13 times more volatile than The Wendys Co. It trades about -0.08 of its total potential returns per unit of risk. The Wendys Co is currently generating about 0.0 per unit of volatility. If you would invest 1,861 in The Wendys Co on September 3, 2024 and sell it today you would lose (25.00) from holding The Wendys Co or give up 1.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HF Sinclair Corp vs. The Wendys Co
Performance |
| Timeline |
| HF Sinclair Corp |
| The Wendys |
HF Sinclair and Wendys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HF Sinclair and Wendys
The main advantage of trading using opposite HF Sinclair and Wendys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HF Sinclair position performs unexpectedly, Wendys 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 Wendys will offset losses from the drop in Wendys' long position.| HF Sinclair vs. Delek Energy | HF Sinclair vs. CVR Energy | HF Sinclair vs. Valero Energy | HF Sinclair vs. Marathon Petroleum Corp |
| Wendys vs. Highway Holdings Limited | Wendys vs. QCR Holdings | Wendys vs. Partner Communications | Wendys vs. Acumen Pharmaceuticals |
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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