Correlation Between Energy Transfer and HF Sinclair
Can any of the company-specific risk be diversified away by investing in both Energy Transfer 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 Energy Transfer and HF Sinclair into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Transfer LP and HF Sinclair Corp, you can compare the effects of market volatilities on Energy Transfer 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 Energy Transfer with a short position of HF Sinclair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Transfer and HF Sinclair.
Diversification Opportunities for Energy Transfer and HF Sinclair
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Energy and DINO is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Energy Transfer LP 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 Energy Transfer 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 Energy Transfer LP 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 Energy Transfer i.e., Energy Transfer and HF Sinclair go up and down completely randomly.
Pair Corralation between Energy Transfer and HF Sinclair
Allowing for the 90-day total investment horizon Energy Transfer LP is expected to generate 0.61 times more return on investment than HF Sinclair. However, Energy Transfer LP is 1.65 times less risky than HF Sinclair. It trades about 0.15 of its potential returns per unit of risk. HF Sinclair Corp is currently generating about -0.05 per unit of risk. If you would invest 1,282 in Energy Transfer LP on November 9, 2024 and sell it today you would earn a total of 755.00 from holding Energy Transfer LP or generate 58.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energy Transfer LP vs. HF Sinclair Corp
Performance |
| Timeline |
| Energy Transfer LP |
| HF Sinclair Corp |
Energy Transfer and HF Sinclair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Transfer and HF Sinclair
The main advantage of trading using opposite Energy Transfer and HF Sinclair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Transfer 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.| Energy Transfer vs. Kinder Morgan | Energy Transfer vs. MPLX LP | Energy Transfer vs. Enbridge | Energy Transfer vs. Enterprise Products Partners |
| 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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