Correlation Between Direct Capital and Delek Automotive
Can any of the company-specific risk be diversified away by investing in both Direct Capital 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 Direct Capital and Delek Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Direct Capital Investments and Delek Automotive Systems, you can compare the effects of market volatilities on Direct Capital 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 Direct Capital with a short position of Delek Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direct Capital and Delek Automotive.
Diversification Opportunities for Direct Capital and Delek Automotive
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Direct and Delek is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Direct Capital Investments 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 Direct Capital 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 Direct Capital Investments 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 Direct Capital i.e., Direct Capital and Delek Automotive go up and down completely randomly.
Pair Corralation between Direct Capital and Delek Automotive
Assuming the 90 days trading horizon Direct Capital Investments is expected to under-perform the Delek Automotive. In addition to that, Direct Capital is 5.14 times more volatile than Delek Automotive Systems. It trades about -0.19 of its total potential returns per unit of risk. Delek Automotive Systems is currently generating about 0.41 per unit of volatility. If you would invest 219,700 in Delek Automotive Systems on August 25, 2024 and sell it today you would earn a total of 37,800 from holding Delek Automotive Systems or generate 17.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Direct Capital Investments vs. Delek Automotive Systems
Performance |
| Timeline |
| Direct Capital Inves |
| Delek Automotive Systems |
Direct Capital and Delek Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direct Capital and Delek Automotive
The main advantage of trading using opposite Direct Capital and Delek Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direct Capital 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.| Direct Capital vs. Amir Marketing and | Direct Capital vs. IDI Insurance | Direct Capital vs. Netz Hotels | Direct Capital vs. Bio Meat Foodtech |
| Delek Automotive vs. Direct Capital Investments | Delek Automotive vs. Safe T Group | Delek Automotive vs. Israel China Biotechnology | Delek Automotive vs. Biomedix Incubator |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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