Correlation Between Delek Energy and Neste Oyj
Can any of the company-specific risk be diversified away by investing in both Delek Energy and Neste Oyj 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 Neste Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delek Energy and Neste Oyj, you can compare the effects of market volatilities on Delek Energy and Neste Oyj 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 Neste Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek Energy and Neste Oyj.
Diversification Opportunities for Delek Energy and Neste Oyj
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Delek and Neste is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Delek Energy and Neste Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neste Oyj 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 Neste Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neste Oyj has no effect on the direction of Delek Energy i.e., Delek Energy and Neste Oyj go up and down completely randomly.
Pair Corralation between Delek Energy and Neste Oyj
Allowing for the 90-day total investment horizon Delek Energy is expected to generate 1.25 times more return on investment than Neste Oyj. However, Delek Energy is 1.25 times more volatile than Neste Oyj. It trades about 0.21 of its potential returns per unit of risk. Neste Oyj is currently generating about -0.26 per unit of risk. If you would invest 1,689 in Delek Energy on August 27, 2024 and sell it today you would earn a total of 220.00 from holding Delek Energy or generate 13.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delek Energy vs. Neste Oyj
Performance |
| Timeline |
| Delek Energy |
| Neste Oyj |
Delek Energy and Neste Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delek Energy and Neste Oyj
The main advantage of trading using opposite Delek Energy and Neste Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delek Energy position performs unexpectedly, Neste Oyj 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 Neste Oyj will offset losses from the drop in Neste Oyj's long position.| Delek Energy vs. Crossamerica Partners LP | Delek Energy vs. Sunoco LP | Delek Energy vs. CVR Energy | Delek Energy vs. Phillips 66 |
| Neste Oyj vs. Cosan SA ADR | Neste Oyj vs. Ultrapar Participacoes SA | Neste Oyj vs. Delek Logistics Partners | Neste Oyj vs. Sunoco LP |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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