Correlation Between Tamar Petroleum and Delek
Can any of the company-specific risk be diversified away by investing in both Tamar Petroleum and Delek 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 Tamar Petroleum and Delek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tamar Petroleum and Delek Group, you can compare the effects of market volatilities on Tamar Petroleum and Delek 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 Tamar Petroleum with a short position of Delek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tamar Petroleum and Delek.
Diversification Opportunities for Tamar Petroleum and Delek
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tamar and Delek is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Tamar Petroleum and Delek Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Group and Tamar Petroleum 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 Tamar Petroleum are associated (or correlated) with Delek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Group has no effect on the direction of Tamar Petroleum i.e., Tamar Petroleum and Delek go up and down completely randomly.
Pair Corralation between Tamar Petroleum and Delek
Assuming the 90 days trading horizon Tamar Petroleum is expected to generate 1.28 times less return on investment than Delek. But when comparing it to its historical volatility, Tamar Petroleum is 1.04 times less risky than Delek. It trades about 0.28 of its potential returns per unit of risk. Delek Group is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 4,415,000 in Delek Group on August 28, 2024 and sell it today you would earn a total of 471,000 from holding Delek Group or generate 10.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tamar Petroleum vs. Delek Group
Performance |
| Timeline |
| Tamar Petroleum |
| Delek Group |
Tamar Petroleum and Delek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tamar Petroleum and Delek
The main advantage of trading using opposite Tamar Petroleum and Delek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tamar Petroleum position performs unexpectedly, Delek 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 will offset losses from the drop in Delek's long position.| Tamar Petroleum vs. Atreyu Capital Markets | Tamar Petroleum vs. IBI Inv House | Tamar Petroleum vs. Delek Automotive Systems | Tamar Petroleum vs. Scope Metals Group |
| Delek vs. Atreyu Capital Markets | Delek vs. IBI Inv House | Delek vs. Delek Automotive Systems | Delek vs. Scope Metals Group |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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