Correlation Between Delek Logistics and Aterian

Can any of the company-specific risk be diversified away by investing in both Delek Logistics and Aterian 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 Aterian 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 Aterian, you can compare the effects of market volatilities on Delek Logistics and Aterian 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 Aterian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek Logistics and Aterian.

Diversification Opportunities for Delek Logistics and Aterian

-0.53

Correlation Coefficient

Delek Logistics  Aterian

Excellent diversification

The 3 months correlation between Delek and Aterian is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Delek Logistics Partners and Aterian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aterian 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 Aterian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aterian has no effect on the direction of Delek Logistics i.e., Delek Logistics and Aterian go up and down completely randomly.

Pair Corralation between Delek Logistics and Aterian

Considering the 90-day investment horizon Delek Logistics Partners is expected to under-perform the Aterian. But the stock apears to be less risky and, when comparing its historical volatility, Delek Logistics Partners is 3.39 times less risky than Aterian. The stock trades about -0.04 of its potential returns per unit of risk. The Aterian is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  190.00  in Aterian on December 4, 2024 and sell it today you would earn a total of  11.00  from holding Aterian or generate 5.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Delek Logistics Partners  vs.  Aterian

Delek Logistics Partners

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Delek Logistics Partners are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent forward-looking signals, Delek Logistics may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Aterian

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aterian has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Delek Logistics and Aterian

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

The idea behind Delek Logistics Partners and Aterian 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.