Correlation Between Wayside Technology and HF SINCLAIR

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

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

Diversification Opportunities for Wayside Technology and HF SINCLAIR

-0.32

Correlation Coefficient

Wayside Technology  HF SINCLAIR

Very good diversification

The 3 months correlation between Wayside and HL80 is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Wayside Technology Group 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 Wayside Technology 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 Wayside Technology Group 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 Wayside Technology i.e., Wayside Technology and HF SINCLAIR go up and down completely randomly.

Pair Corralation between Wayside Technology and HF SINCLAIR

Assuming the 90 days horizon Wayside Technology Group is expected to generate 1.59 times more return on investment than HF SINCLAIR. However, Wayside Technology is 1.59 times more volatile than HF SINCLAIR P. It trades about 0.26 of its potential returns per unit of risk. HF SINCLAIR P is currently generating about -0.05 per unit of risk. If you would invest  7,839  in Wayside Technology Group on September 12, 2024 and sell it today you would earn a total of  4,961  from holding Wayside Technology Group or generate 63.29% return on investment over 90 days.

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

Wayside Technology Group  vs.  HF SINCLAIR P

Wayside Technology

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Wayside Technology Group are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Wayside Technology reported 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 nearly stable basic indicators, HF SINCLAIR is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Wayside Technology and HF SINCLAIR

The main advantage of trading using opposite Wayside Technology and HF SINCLAIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wayside Technology 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 Wayside Technology Group 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.