Correlation Between Suncor Energy and HF Sinclair
Can any of the company-specific risk be diversified away by investing in both Suncor Energy 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 Suncor Energy and HF Sinclair into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suncor Energy and HF Sinclair Corp, you can compare the effects of market volatilities on Suncor Energy 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 Suncor Energy with a short position of HF Sinclair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suncor Energy and HF Sinclair.
Diversification Opportunities for Suncor Energy and HF Sinclair
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Suncor and DINO is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Suncor Energy 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 Suncor Energy 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 Suncor Energy 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 Suncor Energy i.e., Suncor Energy and HF Sinclair go up and down completely randomly.
Pair Corralation between Suncor Energy and HF Sinclair
Allowing for the 90-day total investment horizon Suncor Energy is expected to generate 0.78 times more return on investment than HF Sinclair. However, Suncor Energy is 1.28 times less risky than HF Sinclair. It trades about 0.06 of its potential returns per unit of risk. HF Sinclair Corp is currently generating about -0.05 per unit of risk. If you would invest 3,064 in Suncor Energy on November 9, 2024 and sell it today you would earn a total of 780.00 from holding Suncor Energy or generate 25.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suncor Energy vs. HF Sinclair Corp
Performance |
| Timeline |
| Suncor Energy |
| HF Sinclair Corp |
Suncor Energy and HF Sinclair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suncor Energy and HF Sinclair
The main advantage of trading using opposite Suncor Energy and HF Sinclair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suncor Energy 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.| Suncor Energy vs. Imperial Oil | Suncor Energy vs. Ecopetrol SA ADR | Suncor Energy vs. Petroleo Brasileiro Petrobras | Suncor Energy vs. Equinor ASA ADR |
| 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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