Correlation Between First International and Delek Automotive
Can any of the company-specific risk be diversified away by investing in both First International 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 First International and Delek Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First International Bank and Delek Automotive Systems, you can compare the effects of market volatilities on First International 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 First International with a short position of Delek Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of First International and Delek Automotive.
Diversification Opportunities for First International and Delek Automotive
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and Delek is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding First International Bank 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 First International 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 First International Bank 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 First International i.e., First International and Delek Automotive go up and down completely randomly.
Pair Corralation between First International and Delek Automotive
Assuming the 90 days trading horizon First International is expected to generate 1.93 times less return on investment than Delek Automotive. But when comparing it to its historical volatility, First International Bank is 2.2 times less risky than Delek Automotive. It trades about 0.47 of its potential returns per unit of risk. Delek Automotive Systems is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 219,700 in Delek Automotive Systems on August 29, 2024 and sell it today you would earn a total of 39,500 from holding Delek Automotive Systems or generate 17.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First International Bank vs. Delek Automotive Systems
Performance |
| Timeline |
| First International Bank |
| Delek Automotive Systems |
First International and Delek Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First International and Delek Automotive
The main advantage of trading using opposite First International and Delek Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First International 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.| First International vs. Israel Discount Bank | First International vs. Mizrahi Tefahot | First International vs. Bank Leumi Le Israel | First International vs. Bank Hapoalim |
| Delek Automotive vs. Direct Capital Investments | Delek Automotive vs. Safe T Group | Delek Automotive vs. Israel China Biotechnology | Delek Automotive vs. Biomedix Incubator |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |