Correlation Between Valeura Energy and Delek

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

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

Diversification Opportunities for Valeura Energy and Delek

0.62

Correlation Coefficient

Valeura Energy  Delek

Poor diversification

The 3 months correlation between Valeura and Delek is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Valeura Energy and Delek Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Group and Valeura Energy 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 Valeura Energy 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 Valeura Energy i.e., Valeura Energy and Delek go up and down completely randomly.

Pair Corralation between Valeura Energy and Delek

Assuming the 90 days horizon Valeura Energy is expected to generate 1.84 times more return on investment than Delek. However, Valeura Energy is 1.84 times more volatile than Delek Group. It trades about 0.24 of its potential returns per unit of risk. Delek Group is currently generating about 0.24 per unit of risk. If you would invest  321.00  in Valeura Energy on October 20, 2024 and sell it today you would earn a total of  234.00  from holding Valeura Energy or generate 72.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Valeura Energy  vs.  Delek Group

Valeura Energy

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Valeura Energy are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Valeura Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Delek Group

Risk-Adjusted Performance

18 of 100

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 fairly weak forward-looking signals, Delek showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Valeura Energy and Delek

The main advantage of trading using opposite Valeura Energy and Delek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valeura Energy 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 Valeura Energy 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.