Correlation Between Amgen and Delek Logistics
Can any of the company-specific risk be diversified away by investing in both Amgen 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 Amgen and Delek Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amgen Inc and Delek Logistics Partners, you can compare the effects of market volatilities on Amgen 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 Amgen with a short position of Delek Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and Delek Logistics.
Diversification Opportunities for Amgen and Delek Logistics
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Amgen and Delek is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc 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 Amgen 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 Amgen Inc 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 Amgen i.e., Amgen and Delek Logistics go up and down completely randomly.
Pair Corralation between Amgen and Delek Logistics
Given the investment horizon of 90 days Amgen is expected to generate 1.28 times less return on investment than Delek Logistics. But when comparing it to its historical volatility, Amgen Inc is 1.39 times less risky than Delek Logistics. It trades about 0.02 of its potential returns per unit of risk. Delek Logistics Partners is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,748 in Delek Logistics Partners on September 2, 2024 and sell it today you would earn a total of 286.00 from holding Delek Logistics Partners or generate 7.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amgen Inc vs. Delek Logistics Partners
Performance |
| Timeline |
| Amgen Inc |
| Delek Logistics Partners |
Amgen and Delek Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amgen and Delek Logistics
The main advantage of trading using opposite Amgen and Delek Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen 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 Amgen Inc 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.| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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