Correlation Between Adams Resources and Delek Logistics

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Can any of the company-specific risk be diversified away by investing in both Adams Resources 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 Adams Resources and Delek Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adams Resources Energy and Delek Logistics Partners, you can compare the effects of market volatilities on Adams Resources 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 Adams Resources with a short position of Delek Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adams Resources and Delek Logistics.

Diversification Opportunities for Adams Resources and Delek Logistics

AdamsDelekDiversified AwayAdamsDelekDiversified Away100%
0.5
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Adams and Delek is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Adams Resources Energy 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 Adams Resources 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 Adams Resources Energy 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 Adams Resources i.e., Adams Resources and Delek Logistics go up and down completely randomly.

Pair Corralation between Adams Resources and Delek Logistics

Allowing for the 90-day total investment horizon Adams Resources Energy is expected to generate 0.02 times more return on investment than Delek Logistics. However, Adams Resources Energy is 46.71 times less risky than Delek Logistics. It trades about 0.7 of its potential returns per unit of risk. Delek Logistics Partners is currently generating about -0.05 per unit of risk. If you would invest  3,791  in Adams Resources Energy on November 27, 2024 and sell it today you would earn a total of  7.00  from holding Adams Resources Energy or generate 0.18% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy38.1%
ValuesDaily Returns

Adams Resources Energy  vs.  Delek Logistics Partners

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 010203040
JavaScript chart by amCharts 3.21.15AE DKL
       Timeline  
Adams Resources Energy 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Over the last 90 days Adams Resources Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Adams Resources is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.
Delek Logistics Partners 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Delek Logistics Partners are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent forward-looking signals, Delek Logistics may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb38394041424344

Adams Resources and Delek Logistics Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-13.75-10.3-6.85-3.390.03.517.2110.914.618.3 0.050.100.150.200.250.30
JavaScript chart by amCharts 3.21.15AE DKL
       Returns  

Pair Trading with Adams Resources and Delek Logistics

The main advantage of trading using opposite Adams Resources and Delek Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adams Resources 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 Adams Resources Energy 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 CEOs Directory module to screen CEOs from public companies around the world.

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