Correlation Between Delek Logistics and BECTON

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

Diversification Opportunities for Delek Logistics and BECTON

-0.42

Correlation Coefficient

Delek Logistics  BECTON

Very good diversification

The 3 months correlation between Delek and BECTON is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Delek Logistics Partners and BECTON DICKINSON AND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BECTON DICKINSON AND 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 BECTON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BECTON DICKINSON AND has no effect on the direction of Delek Logistics i.e., Delek Logistics and BECTON go up and down completely randomly.

Pair Corralation between Delek Logistics and BECTON

Considering the 90-day investment horizon Delek Logistics Partners is expected to under-perform the BECTON. In addition to that, Delek Logistics is 4.82 times more volatile than BECTON DICKINSON AND. It trades about -0.02 of its total potential returns per unit of risk. BECTON DICKINSON AND is currently generating about 0.22 per unit of volatility. If you would invest  8,975  in BECTON DICKINSON AND on December 4, 2024 and sell it today you would earn a total of  132.00  from holding BECTON DICKINSON AND or generate 1.47% return on investment over 90 days.

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

Delek Logistics Partners  vs.  BECTON DICKINSON AND

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.

BECTON DICKINSON AND

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BECTON DICKINSON AND are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, BECTON is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Delek Logistics and BECTON

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

The idea behind Delek Logistics Partners and BECTON DICKINSON AND 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.