Correlation Between Viemed Healthcare and Delek Energy

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

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

Diversification Opportunities for Viemed Healthcare and Delek Energy

-0.09

Correlation Coefficient

Viemed Healthcare  Delek Energy

Good diversification

The 3 months correlation between Viemed and Delek is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Viemed Healthcare and Delek Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Energy and Viemed Healthcare 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 Viemed Healthcare are associated (or correlated) with Delek Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Energy has no effect on the direction of Viemed Healthcare i.e., Viemed Healthcare and Delek Energy go up and down completely randomly.

Pair Corralation between Viemed Healthcare and Delek Energy

Considering the 90-day investment horizon Viemed Healthcare is expected to under-perform the Delek Energy. But the stock apears to be less risky and, when comparing its historical volatility, Viemed Healthcare is 1.58 times less risky than Delek Energy. The stock trades about -0.19 of its potential returns per unit of risk. The Delek Energy is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,833  in Delek Energy on October 9, 2024 and sell it today you would earn a total of  2.00  from holding Delek Energy or generate 0.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Viemed Healthcare  vs.  Delek Energy

Viemed Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Viemed Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Viemed Healthcare is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Delek Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Delek Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Delek Energy is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Viemed Healthcare and Delek Energy

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

The idea behind Viemed Healthcare and Delek Energy 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.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.