Correlation Between Sunoco LP and HF Sinclair
Can any of the company-specific risk be diversified away by investing in both Sunoco LP 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 Sunoco LP and HF Sinclair into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunoco LP and HF Sinclair Corp, you can compare the effects of market volatilities on Sunoco LP 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 Sunoco LP with a short position of HF Sinclair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunoco LP and HF Sinclair.
Diversification Opportunities for Sunoco LP and HF Sinclair
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sunoco and DINO is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Sunoco LP 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 Sunoco LP 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 Sunoco LP 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 Sunoco LP i.e., Sunoco LP and HF Sinclair go up and down completely randomly.
Pair Corralation between Sunoco LP and HF Sinclair
Considering the 90-day investment horizon Sunoco LP is expected to generate 0.83 times more return on investment than HF Sinclair. However, Sunoco LP is 1.2 times less risky than HF Sinclair. It trades about 0.03 of its potential returns per unit of risk. HF Sinclair Corp is currently generating about -0.03 per unit of risk. If you would invest 5,057 in Sunoco LP on August 27, 2024 and sell it today you would earn a total of 376.00 from holding Sunoco LP or generate 7.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunoco LP vs. HF Sinclair Corp
Performance |
| Timeline |
| Sunoco LP |
| HF Sinclair Corp |
Sunoco LP and HF Sinclair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunoco LP and HF Sinclair
The main advantage of trading using opposite Sunoco LP and HF Sinclair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunoco LP 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.| Sunoco LP vs. Delek Energy | Sunoco LP vs. Crossamerica Partners LP | Sunoco LP vs. CVR Energy | Sunoco LP vs. Phillips 66 |
| 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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