Correlation Between Delek Energy and Cosan SA
Can any of the company-specific risk be diversified away by investing in both Delek Energy and Cosan SA 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 Delek Energy and Cosan SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delek Energy and Cosan SA ADR, you can compare the effects of market volatilities on Delek Energy and Cosan SA 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 Delek Energy with a short position of Cosan SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek Energy and Cosan SA.
Diversification Opportunities for Delek Energy and Cosan SA
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Delek and Cosan is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Delek Energy and Cosan SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosan SA ADR and Delek Energy 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 Delek Energy are associated (or correlated) with Cosan SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cosan SA ADR has no effect on the direction of Delek Energy i.e., Delek Energy and Cosan SA go up and down completely randomly.
Pair Corralation between Delek Energy and Cosan SA
Allowing for the 90-day total investment horizon Delek Energy is expected to generate 1.17 times more return on investment than Cosan SA. However, Delek Energy is 1.17 times more volatile than Cosan SA ADR. It trades about -0.05 of its potential returns per unit of risk. Cosan SA ADR is currently generating about -0.12 per unit of risk. If you would invest 2,462 in Delek Energy on August 27, 2024 and sell it today you would lose (602.00) from holding Delek Energy or give up 24.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delek Energy vs. Cosan SA ADR
Performance |
| Timeline |
| Delek Energy |
| Cosan SA ADR |
Delek Energy and Cosan SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delek Energy and Cosan SA
The main advantage of trading using opposite Delek Energy and Cosan SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delek Energy position performs unexpectedly, Cosan SA 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 Cosan SA will offset losses from the drop in Cosan SA's long position.| Delek Energy vs. Crossamerica Partners LP | Delek Energy vs. Sunoco LP | Delek Energy vs. CVR Energy | Delek Energy vs. Phillips 66 |
| Cosan SA vs. Delek Energy | Cosan SA vs. Crossamerica Partners LP | Cosan SA vs. Valvoline | Cosan SA 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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