Correlation Between Delek Logistics and Coda Octopus

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

Diversification Opportunities for Delek Logistics and Coda Octopus

-0.6

Correlation Coefficient

Delek Logistics  Coda Octopus

Excellent diversification

The 3 months correlation between Delek and Coda is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Delek Logistics Partners and Coda Octopus Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coda Octopus Group 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 Coda Octopus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coda Octopus Group has no effect on the direction of Delek Logistics i.e., Delek Logistics and Coda Octopus go up and down completely randomly.

Pair Corralation between Delek Logistics and Coda Octopus

Considering the 90-day investment horizon Delek Logistics Partners is expected to generate 0.35 times more return on investment than Coda Octopus. However, Delek Logistics Partners is 2.83 times less risky than Coda Octopus. It trades about 0.06 of its potential returns per unit of risk. Coda Octopus Group is currently generating about -0.38 per unit of risk. If you would invest  3,963  in Delek Logistics Partners on September 21, 2024 and sell it today you would earn a total of  36.00  from holding Delek Logistics Partners or generate 0.91% return on investment over 90 days.

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

Delek Logistics Partners  vs.  Coda Octopus Group

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.

Coda Octopus Group

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Coda Octopus Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental indicators, Coda Octopus may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Delek Logistics and Coda Octopus

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

The idea behind Delek Logistics Partners and Coda Octopus 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.