Correlation Between Delek Automotive and Aryt Industries

Can any of the company-specific risk be diversified away by investing in both Delek Automotive and Aryt Industries 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 Automotive and Aryt Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Delek Automotive Systems and Aryt Industries, you can compare the effects of market volatilities on Delek Automotive and Aryt Industries 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 Automotive with a short position of Aryt Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek Automotive and Aryt Industries.

Diversification Opportunities for Delek Automotive and Aryt Industries

-0.28

Correlation Coefficient

Delek Automotive  Aryt Industries

Very good diversification

The 3 months correlation between Delek and Aryt is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Delek Automotive Systems and Aryt Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aryt Industries and Delek Automotive 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 Automotive Systems are associated (or correlated) with Aryt Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aryt Industries has no effect on the direction of Delek Automotive i.e., Delek Automotive and Aryt Industries go up and down completely randomly.

Pair Corralation between Delek Automotive and Aryt Industries

Assuming the 90 days trading horizon Delek Automotive Systems is expected to under-perform the Aryt Industries. But the stock apears to be less risky and, when comparing its historical volatility, Delek Automotive Systems is 1.92 times less risky than Aryt Industries. The stock trades about -0.05 of its potential returns per unit of risk. The Aryt Industries is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest  91,900  in Aryt Industries on December 30, 2024 and sell it today you would earn a total of  98,800  from holding Aryt Industries or generate 107.51% return on investment over 90 days.

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

Delek Automotive Systems  vs.  Aryt Industries

Delek Automotive Systems

Risk-Adjusted Performance

Very Weak

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

Aryt Industries

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Aryt Industries are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Aryt Industries sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Delek Automotive and Aryt Industries

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

The idea behind Delek Automotive Systems and Aryt Industries 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.