Correlation Between Hooker Furniture and Delek Logistics
Can any of the company-specific risk be diversified away by investing in both Hooker Furniture 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 Hooker Furniture and Delek Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hooker Furniture and Delek Logistics Partners, you can compare the effects of market volatilities on Hooker Furniture 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 Hooker Furniture with a short position of Delek Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hooker Furniture and Delek Logistics.
Diversification Opportunities for Hooker Furniture and Delek Logistics
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hooker and Delek is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Hooker Furniture 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 Hooker Furniture 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 Hooker Furniture 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 Hooker Furniture i.e., Hooker Furniture and Delek Logistics go up and down completely randomly.
Pair Corralation between Hooker Furniture and Delek Logistics
Given the investment horizon of 90 days Hooker Furniture is expected to generate 1.29 times more return on investment than Delek Logistics. However, Hooker Furniture is 1.29 times more volatile than Delek Logistics Partners. It trades about 0.03 of its potential returns per unit of risk. Delek Logistics Partners is currently generating about 0.01 per unit of risk. If you would invest 1,529 in Hooker Furniture on August 24, 2024 and sell it today you would earn a total of 338.00 from holding Hooker Furniture or generate 22.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hooker Furniture vs. Delek Logistics Partners
Performance |
Timeline |
Hooker Furniture |
Delek Logistics Partners |
Hooker Furniture and Delek Logistics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hooker Furniture and Delek Logistics
The main advantage of trading using opposite Hooker Furniture and Delek Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hooker Furniture 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.The idea behind Hooker Furniture and Delek Logistics Partners pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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