Correlation Between Bt Brands and Delek Energy
Can any of the company-specific risk be diversified away by investing in both Bt Brands 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 Bt Brands and Delek Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bt Brands and Delek Energy, you can compare the effects of market volatilities on Bt Brands 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 Bt Brands with a short position of Delek Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bt Brands and Delek Energy.
Diversification Opportunities for Bt Brands and Delek Energy
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between BTBD and Delek is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Bt Brands and Delek Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Energy and Bt Brands 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 Bt Brands 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 Bt Brands i.e., Bt Brands and Delek Energy go up and down completely randomly.
Pair Corralation between Bt Brands and Delek Energy
Given the investment horizon of 90 days Bt Brands is expected to generate 2.08 times more return on investment than Delek Energy. However, Bt Brands is 2.08 times more volatile than Delek Energy. It trades about 0.08 of its potential returns per unit of risk. Delek Energy is currently generating about 0.02 per unit of risk. If you would invest 163.00 in Bt Brands on October 12, 2024 and sell it today you would earn a total of 11.00 from holding Bt Brands or generate 6.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bt Brands vs. Delek Energy
Performance |
| Timeline |
| Bt Brands |
| Delek Energy |
Bt Brands and Delek Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bt Brands and Delek Energy
The main advantage of trading using opposite Bt Brands and Delek Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bt Brands 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.| Bt Brands vs. Alsea SAB de | Bt Brands vs. Marstons PLC | Bt Brands vs. Bagger Daves Burger | Bt Brands vs. Marstons PLC |
| Delek Energy vs. Crossamerica Partners LP | Delek Energy vs. Sunoco LP | Delek Energy vs. CVR Energy | Delek Energy vs. Phillips 66 |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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