Correlation Between Delek Logistics and Valero Energy
Can any of the company-specific risk be diversified away by investing in both Delek Logistics and Valero Energy 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 Valero Energy 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 Valero Energy, you can compare the effects of market volatilities on Delek Logistics and Valero Energy 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 Valero Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek Logistics and Valero Energy.
Diversification Opportunities for Delek Logistics and Valero Energy
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Delek and Valero is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Delek Logistics Partners and Valero Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valero 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 Valero Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valero Energy has no effect on the direction of Delek Logistics i.e., Delek Logistics and Valero Energy go up and down completely randomly.
Pair Corralation between Delek Logistics and Valero Energy
Considering the 90-day investment horizon Delek Logistics Partners is expected to under-perform the Valero Energy. But the stock apears to be less risky and, when comparing its historical volatility, Delek Logistics Partners is 2.15 times less risky than Valero Energy. The stock trades about -0.2 of its potential returns per unit of risk. The Valero Energy is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 13,991 in Valero Energy on November 18, 2024 and sell it today you would lose (460.00) from holding Valero Energy or give up 3.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delek Logistics Partners vs. Valero Energy
Performance |
| Timeline |
| Delek Logistics Partners |
| Valero Energy |
Delek Logistics and Valero Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delek Logistics and Valero Energy
The main advantage of trading using opposite Delek Logistics and Valero Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delek Logistics position performs unexpectedly, Valero Energy 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 Valero Energy will offset losses from the drop in Valero Energy'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 |
| Valero Energy vs. Phillips 66 | Valero Energy vs. HF Sinclair Corp | Valero Energy vs. PBF Energy | Valero Energy vs. CVR 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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