Correlation Between HF Sinclair and United

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

Diversification Opportunities for HF Sinclair and United

0.59

Correlation Coefficient

HF Sinclair  United

Very weak diversification

The 3 months correlation between DINO and United is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding HF Sinclair Corp and United States Cellular in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Cellular 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 United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Cellular has no effect on the direction of HF Sinclair i.e., HF Sinclair and United go up and down completely randomly.

Pair Corralation between HF Sinclair and United

Given the investment horizon of 90 days HF Sinclair Corp is expected to generate 1.37 times more return on investment than United. However, HF Sinclair is 1.37 times more volatile than United States Cellular. It trades about -0.1 of its potential returns per unit of risk. United States Cellular is currently generating about -0.14 per unit of risk. If you would invest  4,466  in HF Sinclair Corp on September 13, 2024 and sell it today you would lose (572.00) from holding HF Sinclair Corp or give up 12.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

HF Sinclair Corp  vs.  United States Cellular

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 latest conflicting performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

United States Cellular

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days United States Cellular has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for United States Cellular investors.

Pair Trading with HF Sinclair and United

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

The idea behind HF Sinclair Corp and United States Cellular 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.