Correlation Between Delek and Matrix

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

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

Diversification Opportunities for Delek and Matrix

0.71

Correlation Coefficient

Delek  Matrix

Poor diversification

The 3 months correlation between Delek and Matrix is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Delek Group and Matrix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matrix 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 Matrix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matrix has no effect on the direction of Delek i.e., Delek and Matrix go up and down completely randomly.

Pair Corralation between Delek and Matrix

Assuming the 90 days trading horizon Delek Group is expected to generate 1.28 times more return on investment than Matrix. However, Delek is 1.28 times more volatile than Matrix. It trades about 0.23 of its potential returns per unit of risk. Matrix is currently generating about 0.08 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 Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Delek Group  vs.  Matrix

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.

Matrix

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Matrix are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Matrix may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Delek and Matrix

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

The idea behind Delek Group and Matrix 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.