Correlation Between HF Sinclair and Porvair Plc

Can any of the company-specific risk be diversified away by investing in both HF Sinclair and Porvair Plc 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 Porvair Plc 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 Porvair plc, you can compare the effects of market volatilities on HF Sinclair and Porvair Plc 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 Porvair Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF Sinclair and Porvair Plc.

Diversification Opportunities for HF Sinclair and Porvair Plc

-0.87

Correlation Coefficient

HF Sinclair  Porvair Plc

Pay attention - limited upside

The 3 months correlation between DINO and Porvair is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding HF Sinclair Corp and Porvair plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Porvair plc 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 Porvair Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Porvair plc has no effect on the direction of HF Sinclair i.e., HF Sinclair and Porvair Plc go up and down completely randomly.

Pair Corralation between HF Sinclair and Porvair Plc

Given the investment horizon of 90 days HF Sinclair Corp is expected to under-perform the Porvair Plc. In addition to that, HF Sinclair is 1.73 times more volatile than Porvair plc. It trades about -0.1 of its total potential returns per unit of risk. Porvair plc is currently generating about 0.1 per unit of volatility. If you would invest  822.00  in Porvair plc on September 4, 2024 and sell it today you would earn a total of  59.00  from holding Porvair plc or generate 7.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

HF Sinclair Corp  vs.  Porvair plc

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.

Porvair plc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Porvair plc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Porvair Plc may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with HF Sinclair and Porvair Plc

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

The idea behind HF Sinclair Corp and Porvair plc 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.