Correlation Between Delek Logistics and Capital Clean
Can any of the company-specific risk be diversified away by investing in both Delek Logistics and Capital Clean 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 Logistics and Capital Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delek Logistics Partners and Capital Clean Energy, you can compare the effects of market volatilities on Delek Logistics and Capital Clean 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 Logistics with a short position of Capital Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek Logistics and Capital Clean.
Diversification Opportunities for Delek Logistics and Capital Clean
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Delek and Capital is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Delek Logistics Partners and Capital Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Clean Energy and Delek Logistics 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 Logistics Partners are associated (or correlated) with Capital Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Clean Energy has no effect on the direction of Delek Logistics i.e., Delek Logistics and Capital Clean go up and down completely randomly.
Pair Corralation between Delek Logistics and Capital Clean
Considering the 90-day investment horizon Delek Logistics is expected to generate 2.42 times less return on investment than Capital Clean. But when comparing it to its historical volatility, Delek Logistics Partners is 1.15 times less risky than Capital Clean. It trades about 0.03 of its potential returns per unit of risk. Capital Clean Energy is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,382 in Capital Clean Energy on September 12, 2024 and sell it today you would earn a total of 448.00 from holding Capital Clean Energy or generate 32.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delek Logistics Partners vs. Capital Clean Energy
Performance |
| Timeline |
| Delek Logistics Partners |
| Capital Clean Energy |
Delek Logistics and Capital Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delek Logistics and Capital Clean
The main advantage of trading using opposite Delek Logistics and Capital Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delek Logistics position performs unexpectedly, Capital Clean 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 Capital Clean will offset losses from the drop in Capital Clean's long position.| Delek Logistics vs. CVR Energy | Delek Logistics vs. PBF Energy | Delek Logistics vs. HF Sinclair Corp | Delek Logistics vs. Par Pacific Holdings |
| Capital Clean vs. Omni Health | Capital Clean vs. Everspin Technologies | Capital Clean vs. Amkor Technology | Capital Clean vs. Vishay Intertechnology |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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