Correlation Between Mitsui and Delek Energy
Can any of the company-specific risk be diversified away by investing in both Mitsui 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 Mitsui and Delek Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsui Company and Delek Energy, you can compare the effects of market volatilities on Mitsui 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 Mitsui with a short position of Delek Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsui and Delek Energy.
Diversification Opportunities for Mitsui and Delek Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mitsui and Delek is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mitsui Company and Delek Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Energy and Mitsui 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 Mitsui Company 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 Mitsui i.e., Mitsui and Delek Energy go up and down completely randomly.
Pair Corralation between Mitsui and Delek Energy
If you would invest (100.00) in Mitsui Company on November 18, 2024 and sell it today you would earn a total of 100.00 from holding Mitsui Company or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Mitsui Company vs. Delek Energy
Performance |
| Timeline |
| Mitsui Company |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Delek Energy |
Mitsui and Delek Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsui and Delek Energy
The main advantage of trading using opposite Mitsui and Delek Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsui 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.The idea behind Mitsui Company and Delek Energy 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 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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