Correlation Between Delek Energy and Vertex Energy
Can any of the company-specific risk be diversified away by investing in both Delek Energy and Vertex 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 Delek Energy and Vertex Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delek Energy and Vertex Energy, you can compare the effects of market volatilities on Delek Energy and Vertex 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 Delek Energy with a short position of Vertex Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek Energy and Vertex Energy.
Diversification Opportunities for Delek Energy and Vertex Energy
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Delek and Vertex is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Delek Energy and Vertex Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vertex Energy 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 Vertex Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vertex Energy has no effect on the direction of Delek Energy i.e., Delek Energy and Vertex Energy go up and down completely randomly.
Pair Corralation between Delek Energy and Vertex Energy
Allowing for the 90-day total investment horizon Delek Energy is expected to generate 0.32 times more return on investment than Vertex Energy. However, Delek Energy is 3.11 times less risky than Vertex Energy. It trades about -0.01 of its potential returns per unit of risk. Vertex Energy is currently generating about -0.08 per unit of risk. If you would invest 2,477 in Delek Energy on August 27, 2024 and sell it today you would lose (617.00) from holding Delek Energy or give up 24.91% 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. Vertex Energy
Performance |
| Timeline |
| Delek Energy |
| Vertex Energy |
Delek Energy and Vertex Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delek Energy and Vertex Energy
The main advantage of trading using opposite Delek Energy and Vertex Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delek Energy position performs unexpectedly, Vertex 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 Vertex Energy will offset losses from the drop in Vertex Energy's long position.| Delek Energy vs. Crossamerica Partners LP | Delek Energy vs. Sunoco LP | Delek Energy vs. CVR Energy | Delek Energy vs. Phillips 66 |
| Vertex Energy vs. Clean Energy Fuels | Vertex Energy vs. Icahn Enterprises LP | Vertex Energy vs. PBF Energy | Vertex Energy vs. Delek Logistics 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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