Correlation Between CSI Compressco and Delek Logistics

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

By analyzing existing cross correlation between CSI Compressco LP and Delek Logistics Partners, you can compare the effects of market volatilities on CSI Compressco and Delek Logistics 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 CSI Compressco with a short position of Delek Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSI Compressco and Delek Logistics.

Diversification Opportunities for CSI Compressco and Delek Logistics

0.29

Correlation Coefficient

CSI Compressco  Delek Logistics

Modest diversification

The 3 months correlation between CSI and Delek is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding CSI Compressco LP and Delek Logistics Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Logistics Partners and CSI Compressco 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 CSI Compressco LP are associated (or correlated) with Delek Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Logistics Partners has no effect on the direction of CSI Compressco i.e., CSI Compressco and Delek Logistics go up and down completely randomly.

Pair Corralation between CSI Compressco and Delek Logistics

Given the investment horizon of 90 days CSI Compressco LP is expected to under-perform the Delek Logistics. In addition to that, CSI Compressco is 1.65 times more volatile than Delek Logistics Partners. It trades about -0.01 of its total potential returns per unit of risk. Delek Logistics Partners is currently generating about 0.01 per unit of volatility. If you would invest  3,861  in Delek Logistics Partners on September 15, 2024 and sell it today you would earn a total of  125.00  from holding Delek Logistics Partners or generate 3.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	29.09%
Values	Daily Returns

CSI Compressco LP  vs.  Delek Logistics Partners

CSI Compressco LP

Risk-Adjusted Performance

0 of 100

Very Weak

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

Delek Logistics Partners

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Delek Logistics Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Delek Logistics is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with CSI Compressco and Delek Logistics

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

The idea behind CSI Compressco LP and Delek Logistics Partners 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.