Correlation Between Fair Isaac and HF SINCLAIR

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

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

Diversification Opportunities for Fair Isaac and HF SINCLAIR

-0.29

Correlation Coefficient

Fair Isaac  HF SINCLAIR

Very good diversification

The 3 months correlation between Fair and HL80 is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Fair Isaac Corp and HF SINCLAIR P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HF SINCLAIR P and Fair Isaac 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 Fair Isaac Corp are associated (or correlated) with HF SINCLAIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HF SINCLAIR P has no effect on the direction of Fair Isaac i.e., Fair Isaac and HF SINCLAIR go up and down completely randomly.

Pair Corralation between Fair Isaac and HF SINCLAIR

Assuming the 90 days trading horizon Fair Isaac Corp is expected to generate 1.09 times more return on investment than HF SINCLAIR. However, Fair Isaac is 1.09 times more volatile than HF SINCLAIR P. It trades about 0.17 of its potential returns per unit of risk. HF SINCLAIR P is currently generating about -0.06 per unit of risk. If you would invest  167,250  in Fair Isaac Corp on September 13, 2024 and sell it today you would earn a total of  41,250  from holding Fair Isaac Corp or generate 24.66% return on investment over 90 days.

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

Fair Isaac Corp  vs.  HF SINCLAIR P

Fair Isaac Corp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fair Isaac Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Fair Isaac unveiled solid returns over the last few months and may actually be approaching a breakup point.

HF SINCLAIR P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HF SINCLAIR P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Fair Isaac and HF SINCLAIR

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

The idea behind Fair Isaac Corp and HF SINCLAIR P 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.