Correlation Between Blue Earth and Delek Energy
Can any of the company-specific risk be diversified away by investing in both Blue Earth and Delek Energy 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 Blue Earth and Delek Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blue Earth Resources and Delek Energy, you can compare the effects of market volatilities on Blue Earth and Delek Energy 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 Blue Earth with a short position of Delek Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Earth and Delek Energy.
Diversification Opportunities for Blue Earth and Delek Energy
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Blue and Delek is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Blue Earth Resources and Delek Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Energy and Blue Earth 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 Blue Earth Resources are associated (or correlated) with Delek Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Energy has no effect on the direction of Blue Earth i.e., Blue Earth and Delek Energy go up and down completely randomly.
Pair Corralation between Blue Earth and Delek Energy
Given the investment horizon of 90 days Blue Earth Resources is expected to generate 5.5 times more return on investment than Delek Energy. However, Blue Earth is 5.5 times more volatile than Delek Energy. It trades about 0.03 of its potential returns per unit of risk. Delek Energy is currently generating about -0.01 per unit of risk. If you would invest 20.00 in Blue Earth Resources on September 5, 2024 and sell it today you would lose (18.32) from holding Blue Earth Resources or give up 91.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blue Earth Resources vs. Delek Energy
Performance |
| Timeline |
| Blue Earth Resources |
| Delek Energy |
Blue Earth and Delek Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blue Earth and Delek Energy
The main advantage of trading using opposite Blue Earth and Delek Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Earth position performs unexpectedly, Delek Energy 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 Energy will offset losses from the drop in Delek Energy's long position.| Blue Earth vs. Delek Energy | Blue Earth vs. PBF Energy | Blue Earth vs. HF Sinclair Corp | Blue Earth vs. Delek Logistics Partners |
| Delek Energy vs. Crossamerica Partners LP | Delek Energy vs. Par Pacific Holdings | Delek Energy vs. Valvoline | Delek Energy vs. Star Gas Partners |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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