Correlation Between HF SINCLAIR and McPhy Energy
Can any of the company-specific risk be diversified away by investing in both HF SINCLAIR and McPhy Energy 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 McPhy Energy 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 McPhy Energy SA, you can compare the effects of market volatilities on HF SINCLAIR and McPhy Energy 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 McPhy Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF SINCLAIR and McPhy Energy.
Diversification Opportunities for HF SINCLAIR and McPhy Energy
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between HL80 and McPhy is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding HF SINCLAIR P and McPhy Energy SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McPhy Energy SA 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 McPhy Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McPhy Energy SA has no effect on the direction of HF SINCLAIR i.e., HF SINCLAIR and McPhy Energy go up and down completely randomly.
Pair Corralation between HF SINCLAIR and McPhy Energy
Assuming the 90 days trading horizon HF SINCLAIR P is expected to generate 0.19 times more return on investment than McPhy Energy. However, HF SINCLAIR P is 5.22 times less risky than McPhy Energy. It trades about -0.18 of its potential returns per unit of risk. McPhy Energy SA is currently generating about -0.23 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HF SINCLAIR P vs. McPhy Energy SA
Performance |
| Timeline |
| HF SINCLAIR P |
| McPhy Energy SA |
HF SINCLAIR and McPhy Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HF SINCLAIR and McPhy Energy
The main advantage of trading using opposite HF SINCLAIR and McPhy Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HF SINCLAIR position performs unexpectedly, McPhy Energy 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 McPhy Energy will offset losses from the drop in McPhy Energy'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 |
| McPhy Energy vs. Apollo Medical Holdings | McPhy Energy vs. MeVis Medical Solutions | McPhy Energy vs. SCANDMEDICAL SOLDK 040 | McPhy Energy vs. BURLINGTON STORES |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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