Correlation Between Delek Logistics and PFIZER

Can any of the company-specific risk be diversified away by investing in both Delek Logistics and PFIZER 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 PFIZER 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 PFIZER INC 43, you can compare the effects of market volatilities on Delek Logistics and PFIZER 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 PFIZER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek Logistics and PFIZER.

Diversification Opportunities for Delek Logistics and PFIZER

0.57

Correlation Coefficient

Delek Logistics  PFIZER

Very weak diversification

The 3 months correlation between Delek and PFIZER is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Delek Logistics Partners and PFIZER INC 43 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PFIZER INC 43 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 PFIZER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PFIZER INC 43 has no effect on the direction of Delek Logistics i.e., Delek Logistics and PFIZER go up and down completely randomly.

Pair Corralation between Delek Logistics and PFIZER

Considering the 90-day investment horizon Delek Logistics Partners is expected to generate 1.95 times more return on investment than PFIZER. However, Delek Logistics is 1.95 times more volatile than PFIZER INC 43. It trades about -0.03 of its potential returns per unit of risk. PFIZER INC 43 is currently generating about -0.15 per unit of risk. If you would invest  4,230  in Delek Logistics Partners on September 24, 2024 and sell it today you would lose (181.00) from holding Delek Logistics Partners or give up 4.28% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	83.08%
Values	Daily Returns

Delek Logistics Partners  vs.  PFIZER INC 43

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.

PFIZER INC 43

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PFIZER INC 43 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for PFIZER INC 43 investors.

Pair Trading with Delek Logistics and PFIZER

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

The idea behind Delek Logistics Partners and PFIZER INC 43 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.