Correlation Between Phillips and HF Sinclair
Can any of the company-specific risk be diversified away by investing in both Phillips 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 Phillips and HF Sinclair into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phillips 66 and HF Sinclair Corp, you can compare the effects of market volatilities on Phillips 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 Phillips with a short position of HF Sinclair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phillips and HF Sinclair.
Diversification Opportunities for Phillips and HF Sinclair
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Phillips and DINO is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Phillips 66 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 Phillips 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 Phillips 66 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 Phillips i.e., Phillips and HF Sinclair go up and down completely randomly.
Pair Corralation between Phillips and HF Sinclair
Considering the 90-day investment horizon Phillips 66 is expected to generate 0.85 times more return on investment than HF Sinclair. However, Phillips 66 is 1.18 times less risky than HF Sinclair. It trades about 0.02 of its potential returns per unit of risk. HF Sinclair Corp is currently generating about -0.04 per unit of risk. If you would invest 11,896 in Phillips 66 on November 1, 2024 and sell it today you would earn a total of 185.00 from holding Phillips 66 or generate 1.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phillips 66 vs. HF Sinclair Corp
Performance |
| Timeline |
| Phillips 66 |
| HF Sinclair Corp |
Phillips and HF Sinclair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phillips and HF Sinclair
The main advantage of trading using opposite Phillips and HF Sinclair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phillips 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.| Phillips vs. Marathon Petroleum Corp | Phillips vs. HF Sinclair Corp | Phillips vs. PBF Energy | Phillips vs. Sunoco LP |
| 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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