Correlation Between HF Sinclair and Icahn Enterprises

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

Diversification Opportunities for HF Sinclair and Icahn Enterprises

0.79

Correlation Coefficient

HF Sinclair  Icahn Enterprises

Poor diversification

The 3 months correlation between DINO and Icahn is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding HF Sinclair Corp and Icahn Enterprises LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icahn Enterprises 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 Icahn Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icahn Enterprises has no effect on the direction of HF Sinclair i.e., HF Sinclair and Icahn Enterprises go up and down completely randomly.

Pair Corralation between HF Sinclair and Icahn Enterprises

Given the investment horizon of 90 days HF Sinclair Corp is expected to generate 0.81 times more return on investment than Icahn Enterprises. However, HF Sinclair Corp is 1.24 times less risky than Icahn Enterprises. It trades about 0.41 of its potential returns per unit of risk. Icahn Enterprises LP is currently generating about 0.07 per unit of risk. If you would invest  2,963  in HF Sinclair Corp on February 22, 2025 and sell it today you would earn a total of  582.00  from holding HF Sinclair Corp or generate 19.64% return on investment over 90 days.

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

HF Sinclair Corp  vs.  Icahn Enterprises LP

HF Sinclair Corp

Risk-Adjusted Performance

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 latest stock price disarray, may contribute to short-term losses for the investors.

Icahn Enterprises

Risk-Adjusted Performance

Very Weak

Over the last 90 days Icahn Enterprises LP has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Icahn Enterprises is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with HF Sinclair and Icahn Enterprises

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

The idea behind HF Sinclair Corp and Icahn Enterprises LP 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.