Correlation Between KVH Industries and Delek Logistics
Can any of the company-specific risk be diversified away by investing in both KVH Industries 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 KVH Industries and Delek Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KVH Industries and Delek Logistics Partners, you can compare the effects of market volatilities on KVH Industries 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 KVH Industries with a short position of Delek Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of KVH Industries and Delek Logistics.
Diversification Opportunities for KVH Industries and Delek Logistics
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between KVH and Delek is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries 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 KVH Industries 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 KVH Industries 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 KVH Industries i.e., KVH Industries and Delek Logistics go up and down completely randomly.
Pair Corralation between KVH Industries and Delek Logistics
Given the investment horizon of 90 days KVH Industries is expected to generate 2.61 times more return on investment than Delek Logistics. However, KVH Industries is 2.61 times more volatile than Delek Logistics Partners. It trades about 0.42 of its potential returns per unit of risk. Delek Logistics Partners is currently generating about 0.45 per unit of risk. If you would invest 463.00 in KVH Industries on September 1, 2024 and sell it today you would earn a total of 88.00 from holding KVH Industries or generate 19.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KVH Industries vs. Delek Logistics Partners
Performance |
| Timeline |
| KVH Industries |
| Delek Logistics Partners |
KVH Industries and Delek Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KVH Industries and Delek Logistics
The main advantage of trading using opposite KVH Industries and Delek Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KVH Industries 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.| KVH Industries vs. Telesat Corp | KVH Industries vs. Comtech Telecommunications Corp | KVH Industries vs. Knowles Cor | KVH Industries vs. Ituran Location and |
| 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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