Correlation Between HF Sinclair and Alaska Air

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

Diversification Opportunities for HF Sinclair and Alaska Air

0.36

Correlation Coefficient

HF Sinclair  Alaska Air

Weak diversification

The 3 months correlation between DINO and Alaska is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding HF Sinclair Corp and Alaska Air Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alaska Air Group 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 Alaska Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alaska Air Group has no effect on the direction of HF Sinclair i.e., HF Sinclair and Alaska Air go up and down completely randomly.

Pair Corralation between HF Sinclair and Alaska Air

Given the investment horizon of 90 days HF Sinclair Corp is expected to generate 0.82 times more return on investment than Alaska Air. However, HF Sinclair Corp is 1.22 times less risky than Alaska Air. It trades about 0.22 of its potential returns per unit of risk. Alaska Air Group is currently generating about 0.05 per unit of risk. If you would invest  3,226  in HF Sinclair Corp on May 5, 2025 and sell it today you would earn a total of  1,010  from holding HF Sinclair Corp or generate 31.31% return on investment over 90 days.

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

HF Sinclair Corp  vs.  Alaska Air Group

HF Sinclair Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in HF Sinclair Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, HF Sinclair displayed solid returns over the last few months and may actually be approaching a breakup point.

Alaska Air Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Alaska Air Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, Alaska Air may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with HF Sinclair and Alaska Air

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

The idea behind HF Sinclair Corp and Alaska Air 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.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.