Correlation Between 25278XAW9 and Delek Logistics

Can any of the company-specific risk be diversified away by investing in both 25278XAW9 and Delek Logistics 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 25278XAW9 and Delek Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FANG 625 15 MAR 53 and Delek Logistics Partners, you can compare the effects of market volatilities on 25278XAW9 and Delek Logistics 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 25278XAW9 with a short position of Delek Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of 25278XAW9 and Delek Logistics.

Diversification Opportunities for 25278XAW9 and Delek Logistics

-0.12

Correlation Coefficient

25278XAW9  Delek Logistics

Good diversification

The 3 months correlation between 25278XAW9 and Delek is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding FANG 625 15 MAR 53 and Delek Logistics Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Logistics Partners and 25278XAW9 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 FANG 625 15 MAR 53 are associated (or correlated) with Delek Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Logistics Partners has no effect on the direction of 25278XAW9 i.e., 25278XAW9 and Delek Logistics go up and down completely randomly.

Pair Corralation between 25278XAW9 and Delek Logistics

Assuming the 90 days trading horizon 25278XAW9 is expected to generate 5.9 times less return on investment than Delek Logistics. In addition to that, 25278XAW9 is 1.14 times more volatile than Delek Logistics Partners. It trades about 0.05 of its total potential returns per unit of risk. Delek Logistics Partners is currently generating about 0.31 per unit of volatility. If you would invest  3,792  in Delek Logistics Partners on October 23, 2024 and sell it today you would earn a total of  728.00  from holding Delek Logistics Partners or generate 19.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.72%
Values	Daily Returns

FANG 625 15 MAR 53  vs.  Delek Logistics Partners

FANG 625 15

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FANG 625 15 MAR 53 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 25278XAW9 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Delek Logistics Partners

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Delek Logistics Partners are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent forward-looking signals, Delek Logistics disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 25278XAW9 and Delek Logistics

The main advantage of trading using opposite 25278XAW9 and Delek Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 25278XAW9 position performs unexpectedly, Delek Logistics 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 Logistics will offset losses from the drop in Delek Logistics' long position.

The idea behind FANG 625 15 MAR 53 and Delek Logistics Partners 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.