Correlation Between Delek and TAT Technologies
Can any of the company-specific risk be diversified away by investing in both Delek and TAT Technologies 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 TAT Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delek Group and TAT Technologies, you can compare the effects of market volatilities on Delek and TAT Technologies 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 TAT Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek and TAT Technologies.
Diversification Opportunities for Delek and TAT Technologies
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Delek and TAT is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Delek Group and TAT Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAT Technologies 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 TAT Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAT Technologies has no effect on the direction of Delek i.e., Delek and TAT Technologies go up and down completely randomly.
Pair Corralation between Delek and TAT Technologies
Assuming the 90 days trading horizon Delek Group is expected to generate 0.66 times more return on investment than TAT Technologies. However, Delek Group is 1.53 times less risky than TAT Technologies. It trades about 0.23 of its potential returns per unit of risk. TAT Technologies is currently generating about 0.08 per unit of risk. If you would invest 4,641,000 in Delek Group on December 29, 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 | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Delek Group vs. TAT Technologies
Performance |
Timeline |
Delek Group |
TAT Technologies |
Delek and TAT Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Delek and TAT Technologies
The main advantage of trading using opposite Delek and TAT Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delek position performs unexpectedly, TAT Technologies 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 TAT Technologies will offset losses from the drop in TAT Technologies' long position.Delek vs. Fattal 1998 Holdings | Delek vs. El Al Israel | Delek vs. Bank Leumi Le Israel | Delek vs. Teva Pharmaceutical Industries |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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