Correlation Between Delek Automotive and El Al
Can any of the company-specific risk be diversified away by investing in both Delek Automotive and El Al 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 El Al 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 El Al Israel, you can compare the effects of market volatilities on Delek Automotive and El Al 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 El Al. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek Automotive and El Al.
Diversification Opportunities for Delek Automotive and El Al
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Delek and ELAL is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Delek Automotive Systems and El Al Israel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on El Al Israel 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 El Al. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of El Al Israel has no effect on the direction of Delek Automotive i.e., Delek Automotive and El Al go up and down completely randomly.
Pair Corralation between Delek Automotive and El Al
Assuming the 90 days trading horizon Delek Automotive Systems is expected to generate 0.35 times more return on investment than El Al. However, Delek Automotive Systems is 2.87 times less risky than El Al. It trades about 0.14 of its potential returns per unit of risk. El Al Israel is currently generating about -0.16 per unit of risk. If you would invest 248,600 in Delek Automotive Systems on September 3, 2024 and sell it today you would earn a total of 8,000 from holding Delek Automotive Systems or generate 3.22% 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. El Al Israel
Performance |
| Timeline |
| Delek Automotive Systems |
| El Al Israel |
Delek Automotive and El Al Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delek Automotive and El Al
The main advantage of trading using opposite Delek Automotive and El Al positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delek Automotive position performs unexpectedly, El Al 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 El Al will offset losses from the drop in El Al's long position.| Delek Automotive vs. Clal Insurance Enterprises | Delek Automotive vs. Israel Discount Bank | Delek Automotive vs. Bezeq Israeli Telecommunication | Delek Automotive vs. Alony Hetz Properties |
| El Al vs. Delek Group | El Al vs. Teva Pharmaceutical Industries | El Al vs. Fattal 1998 Holdings | El Al vs. Bank Leumi Le Israel |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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