Correlation Between Epsilon Energy and HF Sinclair
Can any of the company-specific risk be diversified away by investing in both Epsilon Energy and HF Sinclair 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 Epsilon Energy and HF Sinclair into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Epsilon Energy and HF Sinclair Corp, you can compare the effects of market volatilities on Epsilon Energy and HF Sinclair 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 Epsilon Energy with a short position of HF Sinclair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Epsilon Energy and HF Sinclair.
Diversification Opportunities for Epsilon Energy and HF Sinclair
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Epsilon and DINO is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Epsilon Energy and HF Sinclair Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HF Sinclair Corp and Epsilon Energy 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 Epsilon Energy are associated (or correlated) with HF Sinclair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HF Sinclair Corp has no effect on the direction of Epsilon Energy i.e., Epsilon Energy and HF Sinclair go up and down completely randomly.
Pair Corralation between Epsilon Energy and HF Sinclair
Given the investment horizon of 90 days Epsilon Energy is expected to under-perform the HF Sinclair. But the stock apears to be less risky and, when comparing its historical volatility, Epsilon Energy is 1.42 times less risky than HF Sinclair. The stock trades about -0.09 of its potential returns per unit of risk. The HF Sinclair Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,633 in HF Sinclair Corp on November 18, 2024 and sell it today you would earn a total of 168.00 from holding HF Sinclair Corp or generate 4.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Epsilon Energy vs. HF Sinclair Corp
Performance |
| Timeline |
| Epsilon Energy |
| HF Sinclair Corp |
Epsilon Energy and HF Sinclair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Epsilon Energy and HF Sinclair
The main advantage of trading using opposite Epsilon Energy and HF Sinclair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Epsilon Energy position performs unexpectedly, HF Sinclair 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 HF Sinclair will offset losses from the drop in HF Sinclair's long position.| Epsilon Energy vs. Vaalco Energy | Epsilon Energy vs. PHX Minerals | Epsilon Energy vs. Northern Oil Gas | Epsilon Energy vs. Granite Ridge Resources |
| HF Sinclair vs. Delek Energy | HF Sinclair vs. CVR Energy | HF Sinclair vs. Valero Energy | HF Sinclair 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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