Correlation Between Plaza Centers and Delek

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

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

Diversification Opportunities for Plaza Centers and Delek

-0.56

Correlation Coefficient

Plaza Centers  Delek

Excellent diversification

The 3 months correlation between Plaza and Delek is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Plaza Centers NV and Delek Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Group and Plaza Centers 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 Plaza Centers NV are associated (or correlated) with Delek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Group has no effect on the direction of Plaza Centers i.e., Plaza Centers and Delek go up and down completely randomly.

Pair Corralation between Plaza Centers and Delek

Assuming the 90 days trading horizon Plaza Centers NV is expected to under-perform the Delek. In addition to that, Plaza Centers is 3.35 times more volatile than Delek Group. It trades about -0.04 of its total potential returns per unit of risk. Delek Group is currently generating about 0.23 per unit of volatility. 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	Very Weak
Accuracy	100.0%
Values	Daily Returns

Plaza Centers NV  vs.  Delek Group

Plaza Centers NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Plaza Centers NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain 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.

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.

Pair Trading with Plaza Centers and Delek

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

The idea behind Plaza Centers NV and Delek Group 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.