Correlation Between Delek Energy and Valvoline
Can any of the company-specific risk be diversified away by investing in both Delek Energy and Valvoline 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 Valvoline into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delek Energy and Valvoline, you can compare the effects of market volatilities on Delek Energy and Valvoline 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 Valvoline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek Energy and Valvoline.
Diversification Opportunities for Delek Energy and Valvoline
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Delek and Valvoline is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Delek Energy and Valvoline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valvoline 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 Valvoline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valvoline has no effect on the direction of Delek Energy i.e., Delek Energy and Valvoline go up and down completely randomly.
Pair Corralation between Delek Energy and Valvoline
Allowing for the 90-day total investment horizon Delek Energy is expected to generate 3.35 times less return on investment than Valvoline. In addition to that, Delek Energy is 1.41 times more volatile than Valvoline. It trades about 0.07 of its total potential returns per unit of risk. Valvoline is currently generating about 0.32 per unit of volatility. If you would invest 3,481 in Valvoline on November 8, 2024 and sell it today you would earn a total of 477.00 from holding Valvoline or generate 13.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delek Energy vs. Valvoline
Performance |
| Timeline |
| Delek Energy |
| Valvoline |
Delek Energy and Valvoline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delek Energy and Valvoline
The main advantage of trading using opposite Delek Energy and Valvoline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delek Energy position performs unexpectedly, Valvoline 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 Valvoline will offset losses from the drop in Valvoline's long position.| Delek Energy vs. Icahn Enterprises LP | Delek Energy vs. PBF Energy | Delek Energy vs. Delek Logistics Partners | Delek Energy vs. Aemetis |
| Valvoline vs. Cosan SA ADR | Valvoline vs. Delek Energy | Valvoline vs. Crossamerica Partners LP | Valvoline vs. Par Pacific Holdings |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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