Correlation Between HF SINCLAIR and Aluminumof China
Can any of the company-specific risk be diversified away by investing in both HF SINCLAIR and Aluminumof China 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 Aluminumof China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HF SINCLAIR P and Aluminum of, you can compare the effects of market volatilities on HF SINCLAIR and Aluminumof China 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 Aluminumof China. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF SINCLAIR and Aluminumof China.
Diversification Opportunities for HF SINCLAIR and Aluminumof China
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between HL80 and Aluminumof is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding HF SINCLAIR P and Aluminum of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluminumof China 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 P are associated (or correlated) with Aluminumof China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aluminumof China has no effect on the direction of HF SINCLAIR i.e., HF SINCLAIR and Aluminumof China go up and down completely randomly.
Pair Corralation between HF SINCLAIR and Aluminumof China
Assuming the 90 days trading horizon HF SINCLAIR is expected to generate 1.15 times less return on investment than Aluminumof China. But when comparing it to its historical volatility, HF SINCLAIR P is 2.68 times less risky than Aluminumof China. It trades about 0.1 of its potential returns per unit of risk. Aluminum of is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 57.00 in Aluminum of on August 27, 2024 and sell it today you would earn a total of 1.00 from holding Aluminum of or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HF SINCLAIR P vs. Aluminum of
Performance |
| Timeline |
| HF SINCLAIR P |
| Aluminumof China |
HF SINCLAIR and Aluminumof China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HF SINCLAIR and Aluminumof China
The main advantage of trading using opposite HF SINCLAIR and Aluminumof China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HF SINCLAIR position performs unexpectedly, Aluminumof China 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 Aluminumof China will offset losses from the drop in Aluminumof China's long position.| HF SINCLAIR vs. Consolidated Communications Holdings | HF SINCLAIR vs. Iridium Communications | HF SINCLAIR vs. UNIVERSAL MUSIC GROUP | HF SINCLAIR vs. Spirent Communications plc |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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