Correlation Between HF SINCLAIR and American Airlines

Can any of the company-specific risk be diversified away by investing in both HF SINCLAIR and American Airlines 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 American Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HF SINCLAIR P and American Airlines Group, you can compare the effects of market volatilities on HF SINCLAIR and American Airlines 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 American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF SINCLAIR and American Airlines.

Diversification Opportunities for HF SINCLAIR and American Airlines

0.6

Correlation Coefficient

HF SINCLAIR  American Airlines

Poor diversification

The 3 months correlation between HL80 and American is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding HF SINCLAIR P and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines 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 P are associated (or correlated) with American Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Airlines has no effect on the direction of HF SINCLAIR i.e., HF SINCLAIR and American Airlines go up and down completely randomly.

Pair Corralation between HF SINCLAIR and American Airlines

Assuming the 90 days trading horizon HF SINCLAIR P is expected to generate 0.65 times more return on investment than American Airlines. However, HF SINCLAIR P is 1.53 times less risky than American Airlines. It trades about 0.27 of its potential returns per unit of risk. American Airlines Group is currently generating about 0.1 per unit of risk. If you would invest  2,604  in HF SINCLAIR P on April 25, 2025 and sell it today you would earn a total of  1,176  from holding HF SINCLAIR P or generate 45.16% return on investment over 90 days.

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

HF SINCLAIR P  vs.  American Airlines Group

HF SINCLAIR P

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in HF SINCLAIR P are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, HF SINCLAIR reported solid returns over the last few months and may actually be approaching a breakup point.

American Airlines

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in American Airlines Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, American Airlines reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HF SINCLAIR and American Airlines

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

The idea behind HF SINCLAIR P and American Airlines Group 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .