Correlation Between Delek Logistics and KNOT Offshore
Can any of the company-specific risk be diversified away by investing in both Delek Logistics and KNOT Offshore 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 KNOT Offshore 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 KNOT Offshore Partners, you can compare the effects of market volatilities on Delek Logistics and KNOT Offshore 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 KNOT Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek Logistics and KNOT Offshore.
Diversification Opportunities for Delek Logistics and KNOT Offshore
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Delek and KNOT is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Delek Logistics Partners and KNOT Offshore Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KNOT Offshore Partners 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 KNOT Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KNOT Offshore Partners has no effect on the direction of Delek Logistics i.e., Delek Logistics and KNOT Offshore go up and down completely randomly.
Pair Corralation between Delek Logistics and KNOT Offshore
Considering the 90-day investment horizon Delek Logistics Partners is expected to generate 0.46 times more return on investment than KNOT Offshore. However, Delek Logistics Partners is 2.19 times less risky than KNOT Offshore. It trades about 0.33 of its potential returns per unit of risk. KNOT Offshore Partners is currently generating about -0.05 per unit of risk. If you would invest 3,741 in Delek Logistics Partners on August 27, 2024 and sell it today you would earn a total of 218.00 from holding Delek Logistics Partners or generate 5.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delek Logistics Partners vs. KNOT Offshore Partners
Performance |
| Timeline |
| Delek Logistics Partners |
| KNOT Offshore Partners |
Delek Logistics and KNOT Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delek Logistics and KNOT Offshore
The main advantage of trading using opposite Delek Logistics and KNOT Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delek Logistics position performs unexpectedly, KNOT Offshore 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 KNOT Offshore will offset losses from the drop in KNOT Offshore'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 |
| KNOT Offshore vs. USA Compression Partners | KNOT Offshore vs. Dynagas LNG Partners | KNOT Offshore vs. Crossamerica Partners LP | KNOT Offshore 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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