Correlation Between Delek Logistics and Westinghouse Air
Can any of the company-specific risk be diversified away by investing in both Delek Logistics and Westinghouse Air 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 Westinghouse Air 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 Westinghouse Air Brake, you can compare the effects of market volatilities on Delek Logistics and Westinghouse Air 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 Westinghouse Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek Logistics and Westinghouse Air.
Diversification Opportunities for Delek Logistics and Westinghouse Air
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Delek and Westinghouse is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Delek Logistics Partners and Westinghouse Air Brake in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westinghouse Air Brake 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 Westinghouse Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westinghouse Air Brake has no effect on the direction of Delek Logistics i.e., Delek Logistics and Westinghouse Air go up and down completely randomly.
Pair Corralation between Delek Logistics and Westinghouse Air
Considering the 90-day investment horizon Delek Logistics is expected to generate 1.48 times less return on investment than Westinghouse Air. But when comparing it to its historical volatility, Delek Logistics Partners is 1.12 times less risky than Westinghouse Air. It trades about 0.07 of its potential returns per unit of risk. Westinghouse Air Brake is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 19,884 in Westinghouse Air Brake on September 14, 2024 and sell it today you would earn a total of 313.00 from holding Westinghouse Air Brake or generate 1.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Delek Logistics Partners vs. Westinghouse Air Brake
Performance |
| Timeline |
| Delek Logistics Partners |
| Westinghouse Air Brake |
Delek Logistics and Westinghouse Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delek Logistics and Westinghouse Air
The main advantage of trading using opposite Delek Logistics and Westinghouse Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delek Logistics position performs unexpectedly, Westinghouse Air 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 Westinghouse Air will offset losses from the drop in Westinghouse Air'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 |
| Westinghouse Air vs. Greenbrier Companies | Westinghouse Air vs. LB Foster | Westinghouse Air vs. Freightcar America | Westinghouse Air vs. CSX Corporation |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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