Correlation Between Aldel Financial and Delek Logistics
Can any of the company-specific risk be diversified away by investing in both Aldel Financial 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 Aldel Financial and Delek Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aldel Financial II and Delek Logistics Partners, you can compare the effects of market volatilities on Aldel Financial 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 Aldel Financial with a short position of Delek Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aldel Financial and Delek Logistics.
Diversification Opportunities for Aldel Financial and Delek Logistics
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aldel and Delek is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Aldel Financial II 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 Aldel Financial 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 Aldel Financial II 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 Aldel Financial i.e., Aldel Financial and Delek Logistics go up and down completely randomly.
Pair Corralation between Aldel Financial and Delek Logistics
Assuming the 90 days horizon Aldel Financial is expected to generate 33.98 times less return on investment than Delek Logistics. But when comparing it to its historical volatility, Aldel Financial II is 7.23 times less risky than Delek Logistics. It trades about 0.08 of its potential returns per unit of risk. Delek Logistics Partners is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 3,741 in Delek Logistics Partners on August 29, 2024 and sell it today you would earn a total of 263.00 from holding Delek Logistics Partners or generate 7.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aldel Financial II vs. Delek Logistics Partners
Performance |
| Timeline |
| Aldel Financial II |
| Delek Logistics Partners |
Aldel Financial and Delek Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aldel Financial and Delek Logistics
The main advantage of trading using opposite Aldel Financial and Delek Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aldel Financial 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.| Aldel Financial vs. dMY Squared Technology | Aldel Financial vs. Vine Hill Capital | Aldel Financial vs. DP Cap Acquisition | Aldel Financial vs. PowerUp Acquisition Corp |
| Delek Logistics vs. CVR Energy | Delek Logistics vs. PBF Energy | Delek Logistics vs. HF Sinclair Corp | Delek Logistics vs. Par Pacific Holdings |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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