Correlation Between Repsol SA and Delek Energy
Can any of the company-specific risk be diversified away by investing in both Repsol SA 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 Repsol SA and Delek Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Repsol SA and Delek Energy, you can compare the effects of market volatilities on Repsol SA 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 Repsol SA with a short position of Delek Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Repsol SA and Delek Energy.
Diversification Opportunities for Repsol SA and Delek Energy
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Repsol and Delek is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Repsol SA and Delek Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Energy and Repsol SA 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 Repsol SA 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 Repsol SA i.e., Repsol SA and Delek Energy go up and down completely randomly.
Pair Corralation between Repsol SA and Delek Energy
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 | Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Repsol SA vs. Delek Energy
Performance |
| Timeline |
| Repsol SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Delek Energy |
Repsol SA and Delek Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Repsol SA and Delek Energy
The main advantage of trading using opposite Repsol SA and Delek Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Repsol SA 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 Repsol SA 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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