Correlation Between Delek Automotive and Averbuch Formica
Can any of the company-specific risk be diversified away by investing in both Delek Automotive and Averbuch Formica 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 Delek Automotive and Averbuch Formica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delek Automotive Systems and Averbuch Formica Center, you can compare the effects of market volatilities on Delek Automotive and Averbuch Formica 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 Delek Automotive with a short position of Averbuch Formica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek Automotive and Averbuch Formica.
Diversification Opportunities for Delek Automotive and Averbuch Formica
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Delek and Averbuch is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Delek Automotive Systems and Averbuch Formica Center in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Averbuch Formica Center and Delek Automotive 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 Delek Automotive Systems are associated (or correlated) with Averbuch Formica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Averbuch Formica Center has no effect on the direction of Delek Automotive i.e., Delek Automotive and Averbuch Formica go up and down completely randomly.
Pair Corralation between Delek Automotive and Averbuch Formica
Assuming the 90 days trading horizon Delek Automotive Systems is expected to generate 0.83 times more return on investment than Averbuch Formica. However, Delek Automotive Systems is 1.2 times less risky than Averbuch Formica. It trades about -0.03 of its potential returns per unit of risk. Averbuch Formica Center is currently generating about -0.02 per unit of risk. If you would invest 345,998 in Delek Automotive Systems on January 26, 2024 and sell it today you would lose (140,998) from holding Delek Automotive Systems or give up 40.75% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Delek Automotive Systems vs. Averbuch Formica Center
Performance |
Timeline |
Delek Automotive Systems |
Averbuch Formica Center |
Delek Automotive and Averbuch Formica Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Delek Automotive and Averbuch Formica
The main advantage of trading using opposite Delek Automotive and Averbuch Formica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delek Automotive position performs unexpectedly, Averbuch Formica 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 Averbuch Formica will offset losses from the drop in Averbuch Formica's long position.Delek Automotive vs. Clal Insurance Enterprises | Delek Automotive vs. Israel Discount Bank | Delek Automotive vs. Bezeq Israeli Telecommunication | Delek Automotive vs. Alony Hetz Properties |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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