Correlation Between Delek Logistics and U1566PAD7

Can any of the company-specific risk be diversified away by investing in both Delek Logistics and U1566PAD7 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 U1566PAD7 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 LUMN 45 15 JAN 29, you can compare the effects of market volatilities on Delek Logistics and U1566PAD7 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 U1566PAD7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek Logistics and U1566PAD7.

Diversification Opportunities for Delek Logistics and U1566PAD7

0.29

Correlation Coefficient

Delek Logistics  U1566PAD7

Modest diversification

The 3 months correlation between Delek and U1566PAD7 is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Delek Logistics Partners and LUMN 45 15 JAN 29 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LUMN 45 15 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 U1566PAD7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LUMN 45 15 has no effect on the direction of Delek Logistics i.e., Delek Logistics and U1566PAD7 go up and down completely randomly.

Pair Corralation between Delek Logistics and U1566PAD7

Considering the 90-day investment horizon Delek Logistics Partners is expected to generate 0.24 times more return on investment than U1566PAD7. However, Delek Logistics Partners is 4.2 times less risky than U1566PAD7. It trades about 0.22 of its potential returns per unit of risk. LUMN 45 15 JAN 29 is currently generating about -0.04 per unit of risk. If you would invest  3,806  in Delek Logistics Partners on October 15, 2024 and sell it today you would earn a total of  445.00  from holding Delek Logistics Partners or generate 11.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	50.82%
Values	Daily Returns

Delek Logistics Partners  vs.  LUMN 45 15 JAN 29

Delek Logistics Partners

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Delek Logistics Partners are ranked lower than 16 (%) 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.

LUMN 45 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LUMN 45 15 JAN 29 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak 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 LUMN 45 15 JAN 29 investors.

Pair Trading with Delek Logistics and U1566PAD7

The main advantage of trading using opposite Delek Logistics and U1566PAD7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delek Logistics position performs unexpectedly, U1566PAD7 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 U1566PAD7 will offset losses from the drop in U1566PAD7's long position.

The idea behind Delek Logistics Partners and LUMN 45 15 JAN 29 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.