Correlation Between HF SINCLAIR and Metro AG
Can any of the company-specific risk be diversified away by investing in both HF SINCLAIR and Metro AG 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 Metro AG 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 Metro AG, you can compare the effects of market volatilities on HF SINCLAIR and Metro AG 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 Metro AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF SINCLAIR and Metro AG.
Diversification Opportunities for HF SINCLAIR and Metro AG
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HL80 and Metro is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding HF SINCLAIR P and Metro AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro AG 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 Metro AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro AG has no effect on the direction of HF SINCLAIR i.e., HF SINCLAIR and Metro AG go up and down completely randomly.
Pair Corralation between HF SINCLAIR and Metro AG
Assuming the 90 days trading horizon HF SINCLAIR P is expected to generate 0.82 times more return on investment than Metro AG. However, HF SINCLAIR P is 1.21 times less risky than Metro AG. It trades about -0.18 of its potential returns per unit of risk. Metro AG is currently generating about -0.28 per unit of risk. If you would invest 3,831 in HF SINCLAIR P on September 12, 2024 and sell it today you would lose (191.00) from holding HF SINCLAIR P or give up 4.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
HF SINCLAIR P vs. Metro AG
Performance |
| Timeline |
| HF SINCLAIR P |
| Metro AG |
HF SINCLAIR and Metro AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HF SINCLAIR and Metro AG
The main advantage of trading using opposite HF SINCLAIR and Metro AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HF SINCLAIR position performs unexpectedly, Metro AG 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 Metro AG will offset losses from the drop in Metro AG's long position.| HF SINCLAIR vs. Superior Plus Corp | HF SINCLAIR vs. SIVERS SEMICONDUCTORS AB | HF SINCLAIR vs. Norsk Hydro ASA | HF SINCLAIR vs. Reliance Steel Aluminum |
| Metro AG vs. ALGOMA STEEL GROUP | Metro AG vs. HF SINCLAIR P | Metro AG vs. GFL ENVIRONM | Metro AG vs. COSMOSTEEL HLDGS |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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