Correlation Between Par Pacific and HF Sinclair
Can any of the company-specific risk be diversified away by investing in both Par Pacific 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 Par Pacific and HF Sinclair into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Par Pacific Holdings and HF Sinclair Corp, you can compare the effects of market volatilities on Par Pacific 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 Par Pacific with a short position of HF Sinclair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Par Pacific and HF Sinclair.
Diversification Opportunities for Par Pacific and HF Sinclair
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Par and DINO is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Par Pacific Holdings 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 Par Pacific 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 Par Pacific Holdings 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 Par Pacific i.e., Par Pacific and HF Sinclair go up and down completely randomly.
Pair Corralation between Par Pacific and HF Sinclair
Given the investment horizon of 90 days Par Pacific Holdings is expected to generate 1.17 times more return on investment than HF Sinclair. However, Par Pacific is 1.17 times more volatile than HF Sinclair Corp. It trades about -0.01 of its potential returns per unit of risk. HF Sinclair Corp is currently generating about -0.01 per unit of risk. If you would invest 2,226 in Par Pacific Holdings on August 23, 2024 and sell it today you would lose (506.00) from holding Par Pacific Holdings or give up 22.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Par Pacific Holdings vs. HF Sinclair Corp
Performance |
| Timeline |
| Par Pacific Holdings |
| HF Sinclair Corp |
Par Pacific and HF Sinclair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Par Pacific and HF Sinclair
The main advantage of trading using opposite Par Pacific and HF Sinclair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Par Pacific 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.| Par Pacific vs. Delek Logistics Partners | Par Pacific vs. CVR Energy | Par Pacific vs. PBF Energy | Par Pacific vs. HF Sinclair Corp |
| 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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