Correlation Between Delek Energy and Victorias Secret

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

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

Diversification Opportunities for Delek Energy and Victorias Secret

0.0

Correlation Coefficient

Delek Energy  Victorias Secret

Pay attention - limited upside

The 3 months correlation between Delek and Victorias is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Delek Energy and Victorias Secret Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victorias Secret and Delek Energy 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 Delek Energy are associated (or correlated) with Victorias Secret. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victorias Secret has no effect on the direction of Delek Energy i.e., Delek Energy and Victorias Secret go up and down completely randomly.

Pair Corralation between Delek Energy and Victorias Secret

Allowing for the 90-day total investment horizon Delek Energy is expected to generate 0.94 times more return on investment than Victorias Secret. However, Delek Energy is 1.06 times less risky than Victorias Secret. It trades about 0.02 of its potential returns per unit of risk. Victorias Secret Co is currently generating about -0.28 per unit of risk. If you would invest  1,833  in Delek Energy on October 9, 2024 and sell it today you would earn a total of  2.00  from holding Delek Energy or generate 0.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Delek Energy  vs.  Victorias Secret Co

Delek Energy

Risk-Adjusted Performance

0 of 100

Very Weak

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

Victorias Secret

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Victorias Secret Co are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain fundamental indicators, Victorias Secret displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Delek Energy and Victorias Secret

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

The idea behind Delek Energy and Victorias Secret Co 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.