Correlation Between Delek Automotive and Al Bad
Can any of the company-specific risk be diversified away by investing in both Delek Automotive and Al Bad 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 Automotive and Al Bad into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delek Automotive Systems and Al Bad Massuot Yitzhak, you can compare the effects of market volatilities on Delek Automotive and Al Bad 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 Automotive with a short position of Al Bad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek Automotive and Al Bad.
Diversification Opportunities for Delek Automotive and Al Bad
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Delek and ALBA is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Delek Automotive Systems and Al Bad Massuot Yitzhak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Al Bad Massuot and Delek Automotive 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 Automotive Systems are associated (or correlated) with Al Bad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Al Bad Massuot has no effect on the direction of Delek Automotive i.e., Delek Automotive and Al Bad go up and down completely randomly.
Pair Corralation between Delek Automotive and Al Bad
Assuming the 90 days trading horizon Delek Automotive Systems is expected to under-perform the Al Bad. But the stock apears to be less risky and, when comparing its historical volatility, Delek Automotive Systems is 1.14 times less risky than Al Bad. The stock trades about -0.02 of its potential returns per unit of risk. The Al Bad Massuot Yitzhak is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 90,270 in Al Bad Massuot Yitzhak on August 29, 2024 and sell it today you would earn a total of 96,630 from holding Al Bad Massuot Yitzhak or generate 107.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delek Automotive Systems vs. Al Bad Massuot Yitzhak
Performance |
| Timeline |
| Delek Automotive Systems |
| Al Bad Massuot |
Delek Automotive and Al Bad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delek Automotive and Al Bad
The main advantage of trading using opposite Delek Automotive and Al Bad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delek Automotive position performs unexpectedly, Al Bad 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 Al Bad will offset losses from the drop in Al Bad's long position.| Delek Automotive vs. Alony Hetz Properties | Delek Automotive vs. Harel Insurance Investments | Delek Automotive vs. Delek Group | Delek Automotive vs. Migdal Insurance |
| Al Bad vs. Alony Hetz Properties | Al Bad vs. Shufersal | Al Bad vs. Delek Automotive Systems | Al Bad vs. Tiv Taam |
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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