Correlation Between Star Gas and HF Sinclair
Can any of the company-specific risk be diversified away by investing in both Star Gas 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 Star Gas and HF Sinclair into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Star Gas Partners and HF Sinclair Corp, you can compare the effects of market volatilities on Star Gas 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 Star Gas with a short position of HF Sinclair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Gas and HF Sinclair.
Diversification Opportunities for Star Gas and HF Sinclair
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Star and DINO is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Star Gas Partners 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 Star Gas 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 Star Gas Partners 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 Star Gas i.e., Star Gas and HF Sinclair go up and down completely randomly.
Pair Corralation between Star Gas and HF Sinclair
Considering the 90-day investment horizon Star Gas Partners is expected to generate 0.96 times more return on investment than HF Sinclair. However, Star Gas Partners is 1.04 times less risky than HF Sinclair. It trades about 0.04 of its potential returns per unit of risk. HF Sinclair Corp is currently generating about -0.08 per unit of risk. If you would invest 1,036 in Star Gas Partners on November 1, 2024 and sell it today you would earn a total of 134.00 from holding Star Gas Partners or generate 12.93% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Star Gas Partners vs. HF Sinclair Corp
Performance |
Timeline |
Star Gas Partners |
HF Sinclair Corp |
Star Gas and HF Sinclair Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Star Gas and HF Sinclair
The main advantage of trading using opposite Star Gas and HF Sinclair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Gas 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.Star Gas vs. Ultrapar Participacoes SA | Star Gas vs. Par Pacific Holdings | Star Gas vs. Delek Energy | Star Gas vs. Crossamerica Partners 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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