Correlation Between Sunoco LP and Delek Logistics
Can any of the company-specific risk be diversified away by investing in both Sunoco LP 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 Sunoco LP and Delek Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunoco LP and Delek Logistics Partners, you can compare the effects of market volatilities on Sunoco LP 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 Sunoco LP with a short position of Delek Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunoco LP and Delek Logistics.
Diversification Opportunities for Sunoco LP and Delek Logistics
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sunoco and Delek is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sunoco LP 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 Sunoco LP 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 Sunoco LP 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 Sunoco LP i.e., Sunoco LP and Delek Logistics go up and down completely randomly.
Pair Corralation between Sunoco LP and Delek Logistics
Considering the 90-day investment horizon Sunoco LP is expected to generate 0.95 times more return on investment than Delek Logistics. However, Sunoco LP is 1.05 times less risky than Delek Logistics. It trades about 0.03 of its potential returns per unit of risk. Delek Logistics Partners is currently generating about -0.03 per unit of risk. If you would invest 5,057 in Sunoco LP on August 27, 2024 and sell it today you would earn a total of 376.00 from holding Sunoco LP or generate 7.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunoco LP vs. Delek Logistics Partners
Performance |
| Timeline |
| Sunoco LP |
| Delek Logistics Partners |
Sunoco LP and Delek Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunoco LP and Delek Logistics
The main advantage of trading using opposite Sunoco LP and Delek Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunoco LP 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.| Sunoco LP vs. Delek Energy | Sunoco LP vs. Crossamerica Partners LP | Sunoco LP vs. CVR Energy | Sunoco LP vs. Phillips 66 |
| 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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