Correlation Between Delek Logistics and DCC PLC
Can any of the company-specific risk be diversified away by investing in both Delek Logistics and DCC PLC 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 DCC PLC 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 DCC PLC ADR, you can compare the effects of market volatilities on Delek Logistics and DCC PLC 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 DCC PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek Logistics and DCC PLC.
Diversification Opportunities for Delek Logistics and DCC PLC
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Delek and DCC is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Delek Logistics Partners and DCC PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DCC PLC ADR 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 DCC PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DCC PLC ADR has no effect on the direction of Delek Logistics i.e., Delek Logistics and DCC PLC go up and down completely randomly.
Pair Corralation between Delek Logistics and DCC PLC
Considering the 90-day investment horizon Delek Logistics Partners is expected to generate 9.18 times more return on investment than DCC PLC. However, Delek Logistics is 9.18 times more volatile than DCC PLC ADR. It trades about 0.05 of its potential returns per unit of risk. DCC PLC ADR is currently generating about 0.09 per unit of risk. If you would invest 3,665 in Delek Logistics Partners on September 5, 2024 and sell it today you would earn a total of 325.00 from holding Delek Logistics Partners or generate 8.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delek Logistics Partners vs. DCC PLC ADR
Performance |
| Timeline |
| Delek Logistics Partners |
| DCC PLC ADR |
Delek Logistics and DCC PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delek Logistics and DCC PLC
The main advantage of trading using opposite Delek Logistics and DCC PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delek Logistics position performs unexpectedly, DCC PLC 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 DCC PLC will offset losses from the drop in DCC PLC'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 |
| DCC PLC vs. Ultrapar Participacoes SA | DCC PLC vs. Sunoco LP | DCC PLC vs. HF Sinclair Corp | DCC PLC vs. Delek Energy |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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