Correlation Between Imperial Petroleum and Delek Energy
Can any of the company-specific risk be diversified away by investing in both Imperial Petroleum and Delek Energy 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 Imperial Petroleum and Delek Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Imperial Petroleum Preferred and Delek Energy, you can compare the effects of market volatilities on Imperial Petroleum and Delek Energy 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 Imperial Petroleum with a short position of Delek Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imperial Petroleum and Delek Energy.
Diversification Opportunities for Imperial Petroleum and Delek Energy
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Imperial and Delek is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Imperial Petroleum Preferred and Delek Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Energy and Imperial Petroleum 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 Imperial Petroleum Preferred are associated (or correlated) with Delek Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Energy has no effect on the direction of Imperial Petroleum i.e., Imperial Petroleum and Delek Energy go up and down completely randomly.
Pair Corralation between Imperial Petroleum and Delek Energy
Assuming the 90 days horizon Imperial Petroleum is expected to generate 3.13 times less return on investment than Delek Energy. But when comparing it to its historical volatility, Imperial Petroleum Preferred is 3.76 times less risky than Delek Energy. It trades about 0.17 of its potential returns per unit of risk. Delek Energy is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,689 in Delek Energy on August 23, 2024 and sell it today you would earn a total of 150.00 from holding Delek Energy or generate 8.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Imperial Petroleum Preferred vs. Delek Energy
Performance |
| Timeline |
| Imperial Petroleum |
| Delek Energy |
Imperial Petroleum and Delek Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imperial Petroleum and Delek Energy
The main advantage of trading using opposite Imperial Petroleum and Delek Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imperial Petroleum position performs unexpectedly, Delek Energy 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 Energy will offset losses from the drop in Delek Energy's long position.| Imperial Petroleum vs. Imperial Petroleum | Imperial Petroleum vs. Dynagas LNG Partners | Imperial Petroleum vs. GasLog Partners LP | Imperial Petroleum vs. GasLog Partners LP |
| Delek Energy vs. Crossamerica Partners LP | Delek Energy vs. Sunoco LP | Delek Energy vs. CVR Energy | Delek Energy vs. Phillips 66 |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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