Correlation Between Delek Automotive and OPC Energy
Can any of the company-specific risk be diversified away by investing in both Delek Automotive and OPC Energy 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 OPC Energy 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 OPC Energy, you can compare the effects of market volatilities on Delek Automotive and OPC Energy 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 OPC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek Automotive and OPC Energy.
Diversification Opportunities for Delek Automotive and OPC Energy
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Delek and OPC is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Delek Automotive Systems and OPC Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPC Energy 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 OPC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPC Energy has no effect on the direction of Delek Automotive i.e., Delek Automotive and OPC Energy go up and down completely randomly.
Pair Corralation between Delek Automotive and OPC Energy
Assuming the 90 days trading horizon Delek Automotive Systems is expected to under-perform the OPC Energy. In addition to that, Delek Automotive is 1.01 times more volatile than OPC Energy. It trades about -0.05 of its total potential returns per unit of risk. OPC Energy is currently generating about 0.12 per unit of volatility. If you would invest 293,100 in OPC Energy on December 29, 2024 and sell it today you would earn a total of 38,300 from holding OPC Energy or generate 13.07% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Delek Automotive Systems vs. OPC Energy
Performance |
Timeline |
Delek Automotive Systems |
OPC Energy |
Delek Automotive and OPC Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Delek Automotive and OPC Energy
The main advantage of trading using opposite Delek Automotive and OPC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delek Automotive position performs unexpectedly, OPC Energy 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 OPC Energy will offset losses from the drop in OPC Energy's long position.Delek Automotive vs. Alony Hetz Properties | Delek Automotive vs. Harel Insurance Investments | Delek Automotive vs. Delek Group | Delek Automotive vs. Migdal Insurance |
OPC Energy vs. Enlight Renewable Energy | OPC Energy vs. Energix Renewable Energies | OPC Energy vs. Alony Hetz Properties | OPC Energy vs. Ormat Technologies |
Check out your portfolio center.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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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