Correlation Between IBI Inv and Delek Automotive
Can any of the company-specific risk be diversified away by investing in both IBI Inv 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 IBI Inv and Delek Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IBI Inv House and Delek Automotive Systems, you can compare the effects of market volatilities on IBI Inv 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 IBI Inv with a short position of Delek Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of IBI Inv and Delek Automotive.
Diversification Opportunities for IBI Inv and Delek Automotive
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IBI and Delek is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding IBI Inv House 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 IBI Inv 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 IBI Inv House 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 IBI Inv i.e., IBI Inv and Delek Automotive go up and down completely randomly.
Pair Corralation between IBI Inv and Delek Automotive
Assuming the 90 days trading horizon IBI Inv is expected to generate 1.02 times less return on investment than Delek Automotive. But when comparing it to its historical volatility, IBI Inv House is 1.62 times less risky than Delek Automotive. It trades about 0.65 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 28, 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IBI Inv House vs. Delek Automotive Systems
Performance |
| Timeline |
| IBI Inv House |
| Delek Automotive Systems |
IBI Inv and Delek Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IBI Inv and Delek Automotive
The main advantage of trading using opposite IBI Inv and Delek Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IBI Inv 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.| IBI Inv vs. Bank Hapoalim | IBI Inv vs. Israel Discount Bank | IBI Inv vs. Bezeq Israeli Telecommunication | IBI Inv vs. Elbit Systems |
| 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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