Correlation Between Clean Energy and HF Sinclair

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Can any of the company-specific risk be diversified away by investing in both Clean Energy 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 Clean Energy and HF Sinclair into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clean Energy Fuels and HF Sinclair Corp, you can compare the effects of market volatilities on Clean Energy 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 Clean Energy with a short position of HF Sinclair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Energy and HF Sinclair.

Diversification Opportunities for Clean Energy and HF Sinclair

-0.54
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Clean and DINO is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Clean Energy Fuels 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 Clean Energy 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 Clean Energy Fuels 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 Clean Energy i.e., Clean Energy and HF Sinclair go up and down completely randomly.

Pair Corralation between Clean Energy and HF Sinclair

Given the investment horizon of 90 days Clean Energy Fuels is expected to under-perform the HF Sinclair. In addition to that, Clean Energy is 1.3 times more volatile than HF Sinclair Corp. It trades about -0.21 of its total potential returns per unit of risk. HF Sinclair Corp is currently generating about 0.04 per unit of volatility. If you would invest  5,866  in HF Sinclair Corp on December 29, 2023 and sell it today you would earn a total of  93.00  from holding HF Sinclair Corp or generate 1.59% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Clean Energy Fuels  vs.  HF Sinclair Corp

 Performance 
       Timeline  
Clean Energy Fuels 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Clean Energy Fuels has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
HF Sinclair Corp 

Risk-Adjusted Performance

6 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in HF Sinclair Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, HF Sinclair may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Clean Energy and HF Sinclair Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Clean Energy and HF Sinclair

The main advantage of trading using opposite Clean Energy and HF Sinclair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Energy 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 Clean Energy Fuels 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.
Check out your portfolio center.
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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