Correlation Between HF Sinclair and Altisource Asset

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

Diversification Opportunities for HF Sinclair and Altisource Asset

-0.68

Correlation Coefficient

HF Sinclair  Altisource Asset

Excellent diversification

The 3 months correlation between DINO and Altisource is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding HF Sinclair Corp and Altisource Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altisource Asset Man 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 Altisource Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altisource Asset Man has no effect on the direction of HF Sinclair i.e., HF Sinclair and Altisource Asset go up and down completely randomly.

Pair Corralation between HF Sinclair and Altisource Asset

Given the investment horizon of 90 days HF Sinclair is expected to generate 4.03 times less return on investment than Altisource Asset. But when comparing it to its historical volatility, HF Sinclair Corp is 4.13 times less risky than Altisource Asset. It trades about 0.03 of its potential returns per unit of risk. Altisource Asset Management is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  632.00  in Altisource Asset Management on January 19, 2024 and sell it today you would lose (310.00) from holding Altisource Asset Management or give up 49.05% of portfolio value over 90 days.

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

HF Sinclair Corp  vs.  Altisource Asset Management

HF Sinclair Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HF Sinclair Corp are ranked lower than 7 (%) 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 May 2024.

Altisource Asset Man

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altisource Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with HF Sinclair and Altisource Asset

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

The idea behind HF Sinclair Corp and Altisource Asset Management 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.