Correlation Between HF Sinclair and Star Gas

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

Diversification Opportunities for HF Sinclair and Star Gas

-0.24

Correlation Coefficient

HF Sinclair  Star Gas

Very good diversification

The 3 months correlation between DINO and Star is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding HF Sinclair Corp and Star Gas Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Gas Partners 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 Star Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Gas Partners has no effect on the direction of HF Sinclair i.e., HF Sinclair and Star Gas go up and down completely randomly.

Pair Corralation between HF Sinclair and Star Gas

Given the investment horizon of 90 days HF Sinclair Corp is expected to under-perform the Star Gas. In addition to that, HF Sinclair is 1.11 times more volatile than Star Gas Partners. It trades about -0.11 of its total potential returns per unit of risk. Star Gas Partners is currently generating about 0.09 per unit of volatility. If you would invest  1,136  in Star Gas Partners on August 30, 2024 and sell it today you would earn a total of  122.00  from holding Star Gas Partners or generate 10.74% return on investment over 90 days.

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

HF Sinclair Corp  vs.  Star Gas Partners

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 December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Star Gas Partners

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Star Gas Partners are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Star Gas may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with HF Sinclair and Star Gas

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

The idea behind HF Sinclair Corp and Star Gas Partners 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..