Correlation Between Sinopec Shanghai and Delek Energy
Can any of the company-specific risk be diversified away by investing in both Sinopec Shanghai 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 Sinopec Shanghai and Delek Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sinopec Shanghai Petrochemical and Delek Energy, you can compare the effects of market volatilities on Sinopec Shanghai 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 Sinopec Shanghai with a short position of Delek Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinopec Shanghai and Delek Energy.
Diversification Opportunities for Sinopec Shanghai and Delek Energy
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sinopec and Delek is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Sinopec Shanghai Petrochemical and Delek Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Energy and Sinopec Shanghai 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 Sinopec Shanghai Petrochemical 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 Sinopec Shanghai i.e., Sinopec Shanghai and Delek Energy go up and down completely randomly.
Pair Corralation between Sinopec Shanghai and Delek Energy
Assuming the 90 days horizon Sinopec Shanghai Petrochemical is expected to under-perform the Delek Energy. In addition to that, Sinopec Shanghai is 2.08 times more volatile than Delek Energy. It trades about -0.02 of its total potential returns per unit of risk. Delek Energy is currently generating about 0.21 per unit of volatility. If you would invest 1,689 in Delek Energy on August 28, 2024 and sell it today you would earn a total of 220.00 from holding Delek Energy or generate 13.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinopec Shanghai Petrochemical vs. Delek Energy
Performance |
| Timeline |
| Sinopec Shanghai Pet |
| Delek Energy |
Sinopec Shanghai and Delek Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinopec Shanghai and Delek Energy
The main advantage of trading using opposite Sinopec Shanghai and Delek Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinopec Shanghai 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.| Sinopec Shanghai vs. Cosan SA ADR | Sinopec Shanghai vs. Star Gas Partners | Sinopec Shanghai vs. Neste Oyj | Sinopec Shanghai vs. Valvoline |
| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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