Correlation Between HF Sinclair and Ampol

Can any of the company-specific risk be diversified away by investing in both HF Sinclair and Ampol 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 HF Sinclair and Ampol into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HF Sinclair Corp and Ampol Ltd ADR, you can compare the effects of market volatilities on HF Sinclair and Ampol 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 HF Sinclair with a short position of Ampol. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF Sinclair and Ampol.

Diversification Opportunities for HF Sinclair and Ampol

0.79

Correlation Coefficient

HF Sinclair  Ampol

Poor diversification

The 3 months correlation between DINO and Ampol is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding HF Sinclair Corp and Ampol Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ampol Ltd ADR and HF Sinclair 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 HF Sinclair Corp are associated (or correlated) with Ampol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ampol Ltd ADR has no effect on the direction of HF Sinclair i.e., HF Sinclair and Ampol go up and down completely randomly.

Pair Corralation between HF Sinclair and Ampol

Given the investment horizon of 90 days HF Sinclair Corp is expected to under-perform the Ampol. In addition to that, HF Sinclair is 1.05 times more volatile than Ampol Ltd ADR. It trades about -0.15 of its total potential returns per unit of risk. Ampol Ltd ADR is currently generating about -0.09 per unit of volatility. If you would invest  3,907  in Ampol Ltd ADR on September 17, 2024 and sell it today you would lose (457.00) from holding Ampol Ltd ADR or give up 11.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

HF Sinclair Corp  vs.  Ampol Ltd ADR

HF Sinclair Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HF Sinclair Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Ampol Ltd ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ampol Ltd ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with HF Sinclair and Ampol

The main advantage of trading using opposite HF Sinclair and Ampol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HF Sinclair position performs unexpectedly, Ampol 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 Ampol will offset losses from the drop in Ampol's long position.

The idea behind HF Sinclair Corp and Ampol Ltd ADR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.