Correlation Between JD Sports and Delek Logistics
Can any of the company-specific risk be diversified away by investing in both JD Sports 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 JD Sports and Delek Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JD Sports Fashion and Delek Logistics Partners, you can compare the effects of market volatilities on JD Sports 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 JD Sports with a short position of Delek Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Delek Logistics.
Diversification Opportunities for JD Sports and Delek Logistics
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JDSPY and Delek is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion 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 JD Sports 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 JD Sports Fashion 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 JD Sports i.e., JD Sports and Delek Logistics go up and down completely randomly.
Pair Corralation between JD Sports and Delek Logistics
Assuming the 90 days horizon JD Sports Fashion is expected to under-perform the Delek Logistics. In addition to that, JD Sports is 2.63 times more volatile than Delek Logistics Partners. It trades about -0.04 of its total potential returns per unit of risk. Delek Logistics Partners is currently generating about 0.04 per unit of volatility. If you would invest 3,762 in Delek Logistics Partners on August 31, 2024 and sell it today you would earn a total of 272.00 from holding Delek Logistics Partners or generate 7.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
JD Sports Fashion vs. Delek Logistics Partners
Performance |
| Timeline |
| JD Sports Fashion |
| Delek Logistics Partners |
JD Sports and Delek Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Delek Logistics
The main advantage of trading using opposite JD Sports and Delek Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports 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.| JD Sports vs. Burlington Stores | JD Sports vs. Childrens Place | JD Sports vs. Buckle Inc | JD Sports vs. Shoe Carnival |
| 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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