Correlation Between HF Sinclair and Turning Point

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

Diversification Opportunities for HF Sinclair and Turning Point

-0.67

Correlation Coefficient

HF Sinclair  Turning Point

Excellent diversification

The 3 months correlation between DINO and Turning is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding HF Sinclair Corp and Turning Point Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turning Point Brands 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 Turning Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turning Point Brands has no effect on the direction of HF Sinclair i.e., HF Sinclair and Turning Point go up and down completely randomly.

Pair Corralation between HF Sinclair and Turning Point

Given the investment horizon of 90 days HF Sinclair Corp is expected to under-perform the Turning Point. But the stock apears to be less risky and, when comparing its historical volatility, HF Sinclair Corp is 1.1 times less risky than Turning Point. The stock trades about -0.63 of its potential returns per unit of risk. The Turning Point Brands is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  6,184  in Turning Point Brands on September 22, 2024 and sell it today you would lose (270.00) from holding Turning Point Brands or give up 4.37% of portfolio value over 90 days.

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

HF Sinclair Corp  vs.  Turning Point Brands

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.

Turning Point Brands

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Turning Point Brands are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Turning Point sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HF Sinclair and Turning Point

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

The idea behind HF Sinclair Corp and Turning Point Brands 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..