Correlation Between Delek Automotive and Schnapp
Can any of the company-specific risk be diversified away by investing in both Delek Automotive and Schnapp 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 Schnapp 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 Schnapp, you can compare the effects of market volatilities on Delek Automotive and Schnapp 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 Schnapp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek Automotive and Schnapp.
Diversification Opportunities for Delek Automotive and Schnapp
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Delek and Schnapp is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Delek Automotive Systems and Schnapp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schnapp 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 Schnapp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schnapp has no effect on the direction of Delek Automotive i.e., Delek Automotive and Schnapp go up and down completely randomly.
Pair Corralation between Delek Automotive and Schnapp
Assuming the 90 days trading horizon Delek Automotive is expected to generate 8.73 times less return on investment than Schnapp. But when comparing it to its historical volatility, Delek Automotive Systems is 1.89 times less risky than Schnapp. It trades about 0.09 of its potential returns per unit of risk. Schnapp is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 124,728 in Schnapp on September 14, 2024 and sell it today you would earn a total of 40,972 from holding Schnapp or generate 32.85% 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. Schnapp
Performance |
| Timeline |
| Delek Automotive Systems |
| Schnapp |
Delek Automotive and Schnapp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delek Automotive and Schnapp
The main advantage of trading using opposite Delek Automotive and Schnapp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delek Automotive position performs unexpectedly, Schnapp 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 Schnapp will offset losses from the drop in Schnapp'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 |
| Schnapp vs. Ralco Agencies | Schnapp vs. Nextcom | Schnapp vs. Brimag L | Schnapp vs. Delek Automotive 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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