Correlation Between Neste Oyj and Delek Logistics
Can any of the company-specific risk be diversified away by investing in both Neste Oyj 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 Neste Oyj and Delek Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neste Oyj and Delek Logistics Partners, you can compare the effects of market volatilities on Neste Oyj 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 Neste Oyj with a short position of Delek Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neste Oyj and Delek Logistics.
Diversification Opportunities for Neste Oyj and Delek Logistics
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Neste and Delek is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Neste Oyj 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 Neste Oyj 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 Neste Oyj 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 Neste Oyj i.e., Neste Oyj and Delek Logistics go up and down completely randomly.
Pair Corralation between Neste Oyj and Delek Logistics
Assuming the 90 days horizon Neste Oyj is expected to under-perform the Delek Logistics. In addition to that, Neste Oyj is 3.77 times more volatile than Delek Logistics Partners. It trades about -0.12 of its total potential returns per unit of risk. Delek Logistics Partners is currently generating about 0.4 per unit of volatility. If you would invest 3,748 in Delek Logistics Partners on August 31, 2024 and sell it today you would earn a total of 256.00 from holding Delek Logistics Partners or generate 6.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neste Oyj vs. Delek Logistics Partners
Performance |
| Timeline |
| Neste Oyj |
| Delek Logistics Partners |
Neste Oyj and Delek Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neste Oyj and Delek Logistics
The main advantage of trading using opposite Neste Oyj and Delek Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neste Oyj 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.| Neste Oyj vs. Cosan SA ADR | Neste Oyj vs. Ultrapar Participacoes SA | Neste Oyj vs. Delek Logistics Partners | Neste Oyj vs. Sunoco LP |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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