Correlation Between Airport City and Delek Automotive
Can any of the company-specific risk be diversified away by investing in both Airport City and Delek Automotive 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 Airport City and Delek Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Airport City and Delek Automotive Systems, you can compare the effects of market volatilities on Airport City and Delek Automotive 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 Airport City with a short position of Delek Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airport City and Delek Automotive.
Diversification Opportunities for Airport City and Delek Automotive
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Airport and Delek is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Airport City and Delek Automotive Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Automotive Systems and Airport City 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 Airport City are associated (or correlated) with Delek Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Automotive Systems has no effect on the direction of Airport City i.e., Airport City and Delek Automotive go up and down completely randomly.
Pair Corralation between Airport City and Delek Automotive
Assuming the 90 days trading horizon Airport City is expected to under-perform the Delek Automotive. But the stock apears to be less risky and, when comparing its historical volatility, Airport City is 1.49 times less risky than Delek Automotive. The stock trades about -0.05 of its potential returns per unit of risk. The Delek Automotive Systems is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 304,900 in Delek Automotive Systems on November 27, 2024 and sell it today you would earn a total of 24,100 from holding Delek Automotive Systems or generate 7.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airport City vs. Delek Automotive Systems
Performance |
| Timeline |
| Airport City |
| Delek Automotive Systems |
Airport City and Delek Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airport City and Delek Automotive
The main advantage of trading using opposite Airport City and Delek Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airport City position performs unexpectedly, Delek Automotive 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 Automotive will offset losses from the drop in Delek Automotive's long position.| Airport City vs. Melisron | Airport City vs. Alony Hetz Properties | Airport City vs. Amot Investments | Airport City vs. Azrieli Group |
| Delek Automotive vs. Alony Hetz Properties | Delek Automotive vs. Harel Insurance Investments | Delek Automotive vs. Delek Group | Delek Automotive vs. Migdal Insurance |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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