Correlation Between Valero Energy and HF Sinclair
Can any of the company-specific risk be diversified away by investing in both Valero 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 Valero 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 Valero Energy and HF Sinclair Corp, you can compare the effects of market volatilities on Valero 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 Valero Energy with a short position of HF Sinclair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valero Energy and HF Sinclair.
Diversification Opportunities for Valero Energy and HF Sinclair
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Valero and DINO is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Valero Energy 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 Valero 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 Valero Energy 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 Valero Energy i.e., Valero Energy and HF Sinclair go up and down completely randomly.
Pair Corralation between Valero Energy and HF Sinclair
Considering the 90-day investment horizon Valero Energy is expected to generate 1.72 times less return on investment than HF Sinclair. But when comparing it to its historical volatility, Valero Energy is 1.03 times less risky than HF Sinclair. It trades about 0.18 of its potential returns per unit of risk. HF Sinclair Corp is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 3,630 in HF Sinclair Corp on June 7, 2025 and sell it today you would earn a total of 1,526 from holding HF Sinclair Corp or generate 42.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valero Energy vs. HF Sinclair Corp
Performance |
| Timeline |
| Valero Energy |
| HF Sinclair Corp |
Valero Energy and HF Sinclair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valero Energy and HF Sinclair
The main advantage of trading using opposite Valero Energy and HF Sinclair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valero 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.| Valero Energy vs. Phillips 66 | Valero Energy vs. HF Sinclair Corp | Valero Energy vs. PBF Energy | Valero Energy vs. CVR Energy |
| HF Sinclair vs. Delek Energy | HF Sinclair vs. CVR Energy | HF Sinclair vs. Valero Energy | HF Sinclair vs. Marathon Petroleum Corp |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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