Correlation Between Delek Logistics and Argent Mid

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

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

Diversification Opportunities for Delek Logistics and Argent Mid

-0.24

Correlation Coefficient

Delek Logistics  Argent Mid

Very good diversification

The 3 months correlation between Delek and Argent is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Delek Logistics Partners and Argent Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argent Mid Cap and Delek Logistics 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 Logistics Partners are associated (or correlated) with Argent Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argent Mid Cap has no effect on the direction of Delek Logistics i.e., Delek Logistics and Argent Mid go up and down completely randomly.

Pair Corralation between Delek Logistics and Argent Mid

Considering the 90-day investment horizon Delek Logistics is expected to generate 4.13 times less return on investment than Argent Mid. In addition to that, Delek Logistics is 1.91 times more volatile than Argent Mid Cap. It trades about 0.01 of its total potential returns per unit of risk. Argent Mid Cap is currently generating about 0.09 per unit of volatility. If you would invest  2,319  in Argent Mid Cap on September 14, 2024 and sell it today you would earn a total of  1,323  from holding Argent Mid Cap or generate 57.05% return on investment over 90 days.

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

Delek Logistics Partners  vs.  Argent Mid Cap

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 latest inconsistent performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Argent Mid Cap

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Argent Mid Cap are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward indicators, Argent Mid is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Delek Logistics and Argent Mid

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

The idea behind Delek Logistics Partners and Argent Mid Cap 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 Anywhere module to track or share privately all of your investments from the convenience of any device.