Correlation Between Delek and Rimoni
Can any of the company-specific risk be diversified away by investing in both Delek and Rimoni 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 Rimoni into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delek Group and Rimoni, you can compare the effects of market volatilities on Delek and Rimoni 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 Rimoni. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek and Rimoni.
Diversification Opportunities for Delek and Rimoni
Poor diversification
The 3 months correlation between Delek and Rimoni is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Delek Group and Rimoni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rimoni 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 Rimoni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rimoni has no effect on the direction of Delek i.e., Delek and Rimoni go up and down completely randomly.
Pair Corralation between Delek and Rimoni
Assuming the 90 days trading horizon Delek Group is expected to generate 0.56 times more return on investment than Rimoni. However, Delek Group is 1.79 times less risky than Rimoni. It trades about 0.37 of its potential returns per unit of risk. Rimoni is currently generating about 0.17 per unit of risk. If you would invest 4,397,000 in Delek Group on September 3, 2024 and sell it today you would earn a total of 476,000 from holding Delek Group or generate 10.83% 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. Rimoni
Performance |
| Timeline |
| Delek Group |
| Rimoni |
Delek and Rimoni Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delek and Rimoni
The main advantage of trading using opposite Delek and Rimoni positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delek position performs unexpectedly, Rimoni 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 Rimoni will offset losses from the drop in Rimoni's long position.| Delek vs. Fattal 1998 Holdings | Delek vs. El Al Israel | Delek vs. Bank Leumi Le Israel | Delek vs. Teva Pharmaceutical Industries |
| Rimoni vs. Elbit Systems | Rimoni vs. Bezeq Israeli Telecommunication | Rimoni vs. Bank Hapoalim | Rimoni 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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