Correlation Between Delek Automotive and IBI Inv
Can any of the company-specific risk be diversified away by investing in both Delek Automotive and IBI Inv 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 IBI Inv 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 IBI Inv House, you can compare the effects of market volatilities on Delek Automotive and IBI Inv 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 IBI Inv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek Automotive and IBI Inv.
Diversification Opportunities for Delek Automotive and IBI Inv
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Delek and IBI is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Delek Automotive Systems and IBI Inv House in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBI Inv House 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 IBI Inv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBI Inv House has no effect on the direction of Delek Automotive i.e., Delek Automotive and IBI Inv go up and down completely randomly.
Pair Corralation between Delek Automotive and IBI Inv
Assuming the 90 days trading horizon Delek Automotive Systems is expected to generate 1.9 times more return on investment than IBI Inv. However, Delek Automotive is 1.9 times more volatile than IBI Inv House. It trades about 0.41 of its potential returns per unit of risk. IBI Inv House is currently generating about 0.56 per unit of risk. If you would invest 219,700 in Delek Automotive Systems on August 25, 2024 and sell it today you would earn a total of 37,800 from holding Delek Automotive Systems or generate 17.21% 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. IBI Inv House
Performance |
| Timeline |
| Delek Automotive Systems |
| IBI Inv House |
Delek Automotive and IBI Inv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delek Automotive and IBI Inv
The main advantage of trading using opposite Delek Automotive and IBI Inv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delek Automotive position performs unexpectedly, IBI Inv 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 IBI Inv will offset losses from the drop in IBI Inv's 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 |
| IBI Inv vs. Homebiogas | IBI Inv vs. Batm Advanced Communications | IBI Inv vs. Gamatronic Electronic Industries | IBI Inv vs. Victory Supermarket Chain |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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