Correlation Between Delek Automotive and Internet Gold

Can any of the company-specific risk be diversified away by investing in both Delek Automotive and Internet Gold 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 Internet Gold 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 Internet Gold Golden, you can compare the effects of market volatilities on Delek Automotive and Internet Gold 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 Internet Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek Automotive and Internet Gold.

Diversification Opportunities for Delek Automotive and Internet Gold

0.12

Correlation Coefficient

Delek Automotive  Internet Gold

Average diversification

The 3 months correlation between Delek and Internet is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Delek Automotive Systems and Internet Gold Golden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Internet Gold Golden 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 Internet Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Internet Gold Golden has no effect on the direction of Delek Automotive i.e., Delek Automotive and Internet Gold go up and down completely randomly.

Pair Corralation between Delek Automotive and Internet Gold

Assuming the 90 days trading horizon Delek Automotive Systems is expected to generate 0.35 times more return on investment than Internet Gold. However, Delek Automotive Systems is 2.89 times less risky than Internet Gold. It trades about -0.17 of its potential returns per unit of risk. Internet Gold Golden is currently generating about -0.07 per unit of risk. If you would invest  230,800  in Delek Automotive Systems on January 20, 2024 and sell it today you would lose (19,200) from holding Delek Automotive Systems or give up 8.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Delek Automotive Systems  vs.  Internet Gold Golden

Delek Automotive Systems

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Delek Automotive Systems are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Delek Automotive is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Internet Gold Golden

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Internet Gold Golden are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Internet Gold may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Delek Automotive and Internet Gold

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

The idea behind Delek Automotive Systems and Internet Gold Golden 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..