Correlation Between Delek Logistics and Lava Medtech

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

Diversification Opportunities for Delek Logistics and Lava Medtech

0.02

Correlation Coefficient

Delek Logistics  Lava Medtech

Significant diversification

The 3 months correlation between Delek and Lava is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Delek Logistics Partners and Lava Medtech Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lava Medtech Acquisition 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 Lava Medtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lava Medtech Acquisition has no effect on the direction of Delek Logistics i.e., Delek Logistics and Lava Medtech go up and down completely randomly.

Pair Corralation between Delek Logistics and Lava Medtech

If you would invest  3,892  in Delek Logistics Partners on October 10, 2024 and sell it today you would earn a total of  313.00  from holding Delek Logistics Partners or generate 8.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Delek Logistics Partners  vs.  Lava Medtech Acquisition

Delek Logistics Partners

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Delek Logistics Partners are ranked lower than 15 (%) 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 February 2025.

Lava Medtech Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lava Medtech Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Lava Medtech is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Delek Logistics and Lava Medtech

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

The idea behind Delek Logistics Partners and Lava Medtech Acquisition 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.