Correlation Between Eni SPA and Delek Logistics

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

By analyzing existing cross correlation between Eni SpA ADR and Delek Logistics Partners, you can compare the effects of market volatilities on Eni SPA 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 Eni SPA with a short position of Delek Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eni SPA and Delek Logistics.

Diversification Opportunities for Eni SPA and Delek Logistics

-0.75

Correlation Coefficient

Eni SPA  Delek Logistics

Pay attention - limited upside

The 3 months correlation between Eni and Delek is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Eni SpA ADR 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 Eni SPA 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 Eni SpA ADR 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 Eni SPA i.e., Eni SPA and Delek Logistics go up and down completely randomly.

Pair Corralation between Eni SPA and Delek Logistics

Taking into account the 90-day investment horizon Eni SpA ADR is expected to generate 1.2 times more return on investment than Delek Logistics. However, Eni SPA is 1.2 times more volatile than Delek Logistics Partners. It trades about 0.03 of its potential returns per unit of risk. Delek Logistics Partners is currently generating about -0.12 per unit of risk. If you would invest  3,184  in Eni SpA ADR on February 1, 2024 and sell it today you would earn a total of  19.00  from holding Eni SpA ADR or generate 0.6% return on investment over 90 days.

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

Eni SpA ADR  vs.  Delek Logistics Partners

Eni SpA ADR

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Eni SpA ADR are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Eni SPA is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Delek Logistics Partners

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Delek Logistics Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in June 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Eni SPA and Delek Logistics

The main advantage of trading using opposite Eni SPA and Delek Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eni SPA 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 Eni SpA ADR 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.