Correlation Between Fossil and Delek Logistics
Can any of the company-specific risk be diversified away by investing in both Fossil and Delek Logistics 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 Fossil and Delek Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fossil Group and Delek Logistics Partners, you can compare the effects of market volatilities on Fossil and Delek Logistics 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 Fossil with a short position of Delek Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fossil and Delek Logistics.
Diversification Opportunities for Fossil and Delek Logistics
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fossil and Delek is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Fossil Group and Delek Logistics Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Logistics Partners and Fossil 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 Fossil Group are associated (or correlated) with Delek Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Logistics Partners has no effect on the direction of Fossil i.e., Fossil and Delek Logistics go up and down completely randomly.
Pair Corralation between Fossil and Delek Logistics
Given the investment horizon of 90 days Fossil Group is expected to generate 5.77 times more return on investment than Delek Logistics. However, Fossil is 5.77 times more volatile than Delek Logistics Partners. It trades about 0.05 of its potential returns per unit of risk. Delek Logistics Partners is currently generating about 0.29 per unit of risk. If you would invest 113.00 in Fossil Group on August 24, 2024 and sell it today you would earn a total of 4.00 from holding Fossil Group or generate 3.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fossil Group vs. Delek Logistics Partners
Performance |
| Timeline |
| Fossil Group |
| Delek Logistics Partners |
Fossil and Delek Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fossil and Delek Logistics
The main advantage of trading using opposite Fossil and Delek Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fossil position performs unexpectedly, Delek Logistics 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 Logistics will offset losses from the drop in Delek Logistics' long position.| Fossil vs. Lanvin Group Holdings | Fossil vs. Signet Jewelers | Fossil vs. Tapestry | Fossil vs. Capri Holdings |
| Delek Logistics vs. CVR Energy | Delek Logistics vs. PBF Energy | Delek Logistics vs. HF Sinclair Corp | Delek Logistics vs. Par Pacific Holdings |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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