Correlation Between Clarion Partners and Delek

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

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

Diversification Opportunities for Clarion Partners and Delek

0.59

Correlation Coefficient

Clarion Partners  Delek

Very weak diversification

The 3 months correlation between Clarion and Delek is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Clarion Partners Real and Delek Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Group and Clarion Partners 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 Clarion Partners Real are associated (or correlated) with Delek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Group has no effect on the direction of Clarion Partners i.e., Clarion Partners and Delek go up and down completely randomly.

Pair Corralation between Clarion Partners and Delek

Assuming the 90 days horizon Clarion Partners is expected to generate 37.0 times less return on investment than Delek. But when comparing it to its historical volatility, Clarion Partners Real is 57.53 times less risky than Delek. It trades about 0.54 of its potential returns per unit of risk. Delek Group is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest  1,272  in Delek Group on October 20, 2024 and sell it today you would earn a total of  270.00  from holding Delek Group or generate 21.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

Clarion Partners Real  vs.  Delek Group

Clarion Partners Real

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Clarion Partners Real are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Clarion Partners is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Delek Group

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Delek Group are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward-looking signals, Delek showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Clarion Partners and Delek

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

The idea behind Clarion Partners Real and Delek 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.