Correlation Between Delek Automotive and Energix Renewable

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

Diversification Opportunities for Delek Automotive and Energix Renewable

0.05

Correlation Coefficient

Delek Automotive  Energix Renewable

Significant diversification

The 3 months correlation between Delek and Energix is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Delek Automotive Systems and Energix Renewable Energies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energix Renewable 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 Energix Renewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energix Renewable has no effect on the direction of Delek Automotive i.e., Delek Automotive and Energix Renewable go up and down completely randomly.

Pair Corralation between Delek Automotive and Energix Renewable

Assuming the 90 days trading horizon Delek Automotive Systems is expected to generate 1.09 times more return on investment than Energix Renewable. However, Delek Automotive is 1.09 times more volatile than Energix Renewable Energies. It trades about -0.05 of its potential returns per unit of risk. Energix Renewable Energies is currently generating about -0.19 per unit of risk. If you would invest  285,600  in Delek Automotive Systems on December 30, 2024 and sell it today you would lose (19,900) from holding Delek Automotive Systems or give up 6.97% of portfolio value over 90 days.

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

Delek Automotive Systems  vs.  Energix Renewable Energies

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.

Energix Renewable

Risk-Adjusted Performance

Very Weak

Over the last 90 days Energix Renewable Energies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Delek Automotive and Energix Renewable

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

The idea behind Delek Automotive Systems and Energix Renewable Energies 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 Commodity Directory module to find actively traded commodities issued by global exchanges.