Correlation Between Delek Automotive and Aryt Industries
Can any of the company-specific risk be diversified away by investing in both Delek Automotive and Aryt Industries 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 Aryt Industries 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 Aryt Industries, you can compare the effects of market volatilities on Delek Automotive and Aryt Industries 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 Aryt Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek Automotive and Aryt Industries.
Diversification Opportunities for Delek Automotive and Aryt Industries
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Delek and Aryt is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Delek Automotive Systems and Aryt Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aryt Industries 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 Aryt Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aryt Industries has no effect on the direction of Delek Automotive i.e., Delek Automotive and Aryt Industries go up and down completely randomly.
Pair Corralation between Delek Automotive and Aryt Industries
Assuming the 90 days trading horizon Delek Automotive is expected to generate 1.31 times less return on investment than Aryt Industries. But when comparing it to its historical volatility, Delek Automotive Systems is 3.45 times less risky than Aryt Industries. It trades about 0.41 of its potential returns per unit of risk. Aryt Industries is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 47,930 in Aryt Industries on August 29, 2024 and sell it today you would earn a total of 9,260 from holding Aryt Industries or generate 19.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delek Automotive Systems vs. Aryt Industries
Performance |
| Timeline |
| Delek Automotive Systems |
| Aryt Industries |
Delek Automotive and Aryt Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delek Automotive and Aryt Industries
The main advantage of trading using opposite Delek Automotive and Aryt Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delek Automotive position performs unexpectedly, Aryt Industries 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 Aryt Industries will offset losses from the drop in Aryt Industries' long position.| Delek Automotive vs. Direct Capital Investments | Delek Automotive vs. Safe T Group | Delek Automotive vs. Israel China Biotechnology | Delek Automotive vs. Biomedix Incubator |
| Aryt Industries vs. Orbit Technologies | Aryt Industries vs. Tower Semiconductor | Aryt Industries vs. Elron Electronic Industries | Aryt Industries vs. Elbit Systems |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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