Correlation Between Delek and Israel Canada
Can any of the company-specific risk be diversified away by investing in both Delek and Israel Canada 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 and Israel Canada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delek Group and Israel Canada, you can compare the effects of market volatilities on Delek and Israel Canada 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 with a short position of Israel Canada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek and Israel Canada.
Diversification Opportunities for Delek and Israel Canada
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Delek and Israel is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Delek Group and Israel Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Canada and Delek 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 Group are associated (or correlated) with Israel Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Canada has no effect on the direction of Delek i.e., Delek and Israel Canada go up and down completely randomly.
Pair Corralation between Delek and Israel Canada
Assuming the 90 days trading horizon Delek is expected to generate 1.27 times less return on investment than Israel Canada. In addition to that, Delek is 1.15 times more volatile than Israel Canada. It trades about 0.36 of its total potential returns per unit of risk. Israel Canada is currently generating about 0.52 per unit of volatility. If you would invest 134,300 in Israel Canada on August 28, 2024 and sell it today you would earn a total of 18,600 from holding Israel Canada or generate 13.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delek Group vs. Israel Canada
Performance |
| Timeline |
| Delek Group |
| Israel Canada |
Delek and Israel Canada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delek and Israel Canada
The main advantage of trading using opposite Delek and Israel Canada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delek position performs unexpectedly, Israel Canada 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 Israel Canada will offset losses from the drop in Israel Canada's long position.| Delek vs. Fattal 1998 Holdings | Delek vs. El Al Israel | Delek vs. Bank Leumi Le Israel | Delek vs. Teva Pharmaceutical Industries |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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