Correlation Between SNDL and HF Sinclair

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

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

Diversification Opportunities for SNDL and HF Sinclair

0.07

Correlation Coefficient

SNDL  HF Sinclair

Significant diversification

The 3 months correlation between SNDL and DINO is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding SNDL Inc and HF Sinclair Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HF Sinclair Corp and SNDL 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 SNDL Inc 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 Corp has no effect on the direction of SNDL i.e., SNDL and HF Sinclair go up and down completely randomly.

Pair Corralation between SNDL and HF Sinclair

Given the investment horizon of 90 days SNDL Inc is expected to generate 2.28 times more return on investment than HF Sinclair. However, SNDL is 2.28 times more volatile than HF Sinclair Corp. It trades about 0.04 of its potential returns per unit of risk. HF Sinclair Corp is currently generating about -0.02 per unit of risk. If you would invest  138.00  in SNDL Inc on September 12, 2024 and sell it today you would earn a total of  48.00  from holding SNDL Inc or generate 34.78% return on investment over 90 days.

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

SNDL Inc  vs.  HF Sinclair Corp

SNDL Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SNDL Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

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.

Pair Trading with SNDL and HF Sinclair

The main advantage of trading using opposite SNDL and HF Sinclair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNDL 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 SNDL Inc and HF Sinclair Corp 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.