Correlation Between Victorias Secret and Delek Energy

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

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

Diversification Opportunities for Victorias Secret and Delek Energy

0.58

Correlation Coefficient

Victorias Secret  Delek Energy

Very weak diversification

The 3 months correlation between Victorias and Delek is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Victorias Secret Co and Delek Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Energy and Victorias Secret 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 Victorias Secret Co 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 Victorias Secret i.e., Victorias Secret and Delek Energy go up and down completely randomly.

Pair Corralation between Victorias Secret and Delek Energy

Given the investment horizon of 90 days Victorias Secret Co is expected to under-perform the Delek Energy. In addition to that, Victorias Secret is 1.15 times more volatile than Delek Energy. It trades about -0.31 of its total potential returns per unit of risk. Delek Energy is currently generating about 0.06 per unit of volatility. If you would invest  1,569  in Delek Energy on December 20, 2024 and sell it today you would earn a total of  144.00  from holding Delek Energy or generate 9.18% return on investment over 90 days.

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

Victorias Secret Co  vs.  Delek Energy

Victorias Secret

Risk-Adjusted Performance

Very Weak

Over the last 90 days Victorias Secret Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Delek Energy

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Delek Energy are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Delek Energy disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Victorias Secret and Delek Energy

The main advantage of trading using opposite Victorias Secret and Delek Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victorias Secret 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 Victorias Secret Co 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.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.