Correlation Between Delek Logistics and Rocky Brands
Can any of the company-specific risk be diversified away by investing in both Delek Logistics and Rocky Brands 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 Rocky Brands 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 Rocky Brands, you can compare the effects of market volatilities on Delek Logistics and Rocky Brands 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 Rocky Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek Logistics and Rocky Brands.
Diversification Opportunities for Delek Logistics and Rocky Brands
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Delek and Rocky is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Delek Logistics Partners and Rocky Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rocky Brands 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 Rocky Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rocky Brands has no effect on the direction of Delek Logistics i.e., Delek Logistics and Rocky Brands go up and down completely randomly.
Pair Corralation between Delek Logistics and Rocky Brands
Considering the 90-day investment horizon Delek Logistics is expected to generate 3.97 times less return on investment than Rocky Brands. But when comparing it to its historical volatility, Delek Logistics Partners is 1.52 times less risky than Rocky Brands. It trades about 0.13 of its potential returns per unit of risk. Rocky Brands is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 2,280 in Rocky Brands on November 1, 2024 and sell it today you would earn a total of 303.00 from holding Rocky Brands or generate 13.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Delek Logistics Partners vs. Rocky Brands
Performance |
| Timeline |
| Delek Logistics Partners |
| Rocky Brands |
Delek Logistics and Rocky Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delek Logistics and Rocky Brands
The main advantage of trading using opposite Delek Logistics and Rocky Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delek Logistics position performs unexpectedly, Rocky Brands 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 Rocky Brands will offset losses from the drop in Rocky Brands' long position.| Delek Logistics vs. CVR Energy | Delek Logistics vs. PBF Energy | Delek Logistics vs. HF Sinclair Corp | Delek Logistics vs. Par Pacific Holdings |
| Rocky Brands vs. Vera Bradley | Rocky Brands vs. Steven Madden | Rocky Brands vs. Wolverine World Wide | Rocky Brands vs. Caleres |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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