Correlation Between El Al and Delek Automotive
Can any of the company-specific risk be diversified away by investing in both El Al and Delek Automotive 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 El Al and Delek Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between El Al Israel and Delek Automotive Systems, you can compare the effects of market volatilities on El Al and Delek Automotive 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 El Al with a short position of Delek Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of El Al and Delek Automotive.
Diversification Opportunities for El Al and Delek Automotive
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ELAL and Delek is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding El Al Israel and Delek Automotive Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Automotive Systems and El Al 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 El Al Israel are associated (or correlated) with Delek Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Automotive Systems has no effect on the direction of El Al i.e., El Al and Delek Automotive go up and down completely randomly.
Pair Corralation between El Al and Delek Automotive
Assuming the 90 days trading horizon El Al Israel is expected to under-perform the Delek Automotive. In addition to that, El Al is 2.87 times more volatile than Delek Automotive Systems. It trades about -0.16 of its total potential returns per unit of risk. Delek Automotive Systems is currently generating about 0.14 per unit of volatility. 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 |
El Al Israel vs. Delek Automotive Systems
Performance |
| Timeline |
| El Al Israel |
| Delek Automotive Systems |
El Al and Delek Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with El Al and Delek Automotive
The main advantage of trading using opposite El Al and Delek Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if El Al position performs unexpectedly, Delek Automotive 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 Delek Automotive will offset losses from the drop in Delek Automotive's long position.| El Al vs. Delek Group | El Al vs. Teva Pharmaceutical Industries | El Al vs. Fattal 1998 Holdings | El Al vs. Bank Leumi Le Israel |
| Delek Automotive vs. Clal Insurance Enterprises | Delek Automotive vs. Israel Discount Bank | Delek Automotive vs. Bezeq Israeli Telecommunication | Delek Automotive vs. Alony Hetz Properties |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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