Correlation Between Atreyu Capital and Delek Automotive

Can any of the company-specific risk be diversified away by investing in both Atreyu Capital and Delek Automotive 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 Atreyu Capital and Delek Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Atreyu Capital Markets and Delek Automotive Systems, you can compare the effects of market volatilities on Atreyu Capital and Delek Automotive 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 Atreyu Capital with a short position of Delek Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atreyu Capital and Delek Automotive.

Diversification Opportunities for Atreyu Capital and Delek Automotive

0.62

Correlation Coefficient

Atreyu Capital  Delek Automotive

Poor diversification

The 3 months correlation between Atreyu and Delek is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Atreyu Capital Markets and Delek Automotive Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Automotive Systems and Atreyu Capital 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 Atreyu Capital Markets are associated (or correlated) with Delek Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Automotive Systems has no effect on the direction of Atreyu Capital i.e., Atreyu Capital and Delek Automotive go up and down completely randomly.

Pair Corralation between Atreyu Capital and Delek Automotive

Assuming the 90 days trading horizon Atreyu Capital Markets is expected to generate 0.85 times more return on investment than Delek Automotive. However, Atreyu Capital Markets is 1.17 times less risky than Delek Automotive. It trades about 0.14 of its potential returns per unit of risk. Delek Automotive Systems is currently generating about -0.05 per unit of risk. If you would invest  691,000  in Atreyu Capital Markets on December 30, 2024 and sell it today you would earn a total of  97,900  from holding Atreyu Capital Markets or generate 14.17% return on investment over 90 days.

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

Atreyu Capital Markets  vs.  Delek Automotive Systems

Atreyu Capital Markets

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Atreyu Capital Markets are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Atreyu Capital sustained solid returns over the last few months and may actually be approaching a breakup point.

Delek Automotive Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days Delek Automotive Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Atreyu Capital and Delek Automotive

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

The idea behind Atreyu Capital Markets and Delek Automotive Systems 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.