Correlation Between HF Sinclair and AerSale Corp

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

Diversification Opportunities for HF Sinclair and AerSale Corp

-0.22

Correlation Coefficient

HF Sinclair  AerSale Corp

Very good diversification

The 3 months correlation between DINO and AerSale is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding HF Sinclair Corp and AerSale Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerSale Corp 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 AerSale Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AerSale Corp has no effect on the direction of HF Sinclair i.e., HF Sinclair and AerSale Corp go up and down completely randomly.

Pair Corralation between HF Sinclair and AerSale Corp

Given the investment horizon of 90 days HF Sinclair Corp is expected to generate 0.48 times more return on investment than AerSale Corp. However, HF Sinclair Corp is 2.1 times less risky than AerSale Corp. It trades about 0.0 of its potential returns per unit of risk. AerSale Corp is currently generating about -0.13 per unit of risk. If you would invest  5,487  in HF Sinclair Corp on February 4, 2024 and sell it today you would lose (63.00) from holding HF Sinclair Corp or give up 1.15% of portfolio value over 90 days.

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

HF Sinclair Corp  vs.  AerSale Corp

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 very healthy basic indicators, HF Sinclair is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

AerSale Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AerSale Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's essential indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with HF Sinclair and AerSale Corp

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

The idea behind HF Sinclair Corp and AerSale 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.