Correlation Between Delek and Hanan Mor

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

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

Diversification Opportunities for Delek and Hanan Mor

-0.34

Correlation Coefficient

Delek  Hanan Mor

Very good diversification

The 3 months correlation between Delek and Hanan is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Delek Group and Hanan Mor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanan Mor and Delek 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 Group are associated (or correlated) with Hanan Mor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanan Mor has no effect on the direction of Delek i.e., Delek and Hanan Mor go up and down completely randomly.

Pair Corralation between Delek and Hanan Mor

Assuming the 90 days trading horizon Delek Group is expected to generate 0.65 times more return on investment than Hanan Mor. However, Delek Group is 1.55 times less risky than Hanan Mor. It trades about 0.23 of its potential returns per unit of risk. Hanan Mor is currently generating about -0.22 per unit of risk. If you would invest  4,641,000  in Delek Group on December 30, 2024 and sell it today you would earn a total of  1,319,000  from holding Delek Group or generate 28.42% return on investment over 90 days.

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

Delek Group  vs.  Hanan Mor

Delek Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Delek Group are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Delek unveiled solid returns over the last few months and may actually be approaching a breakup point.

Hanan Mor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hanan Mor 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 and Hanan Mor

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

The idea behind Delek Group and Hanan Mor 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.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.