Correlation Between Ultrapar Participacoes and Delek Logistics
Can any of the company-specific risk be diversified away by investing in both Ultrapar Participacoes 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 Ultrapar Participacoes and Delek Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ultrapar Participacoes SA and Delek Logistics Partners, you can compare the effects of market volatilities on Ultrapar Participacoes 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 Ultrapar Participacoes with a short position of Delek Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultrapar Participacoes and Delek Logistics.
Diversification Opportunities for Ultrapar Participacoes and Delek Logistics
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ultrapar and Delek is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ultrapar Participacoes SA 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 Ultrapar Participacoes 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 Ultrapar Participacoes SA 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 Ultrapar Participacoes i.e., Ultrapar Participacoes and Delek Logistics go up and down completely randomly.
Pair Corralation between Ultrapar Participacoes and Delek Logistics
Considering the 90-day investment horizon Ultrapar Participacoes is expected to generate 1.12 times less return on investment than Delek Logistics. In addition to that, Ultrapar Participacoes is 2.0 times more volatile than Delek Logistics Partners. It trades about 0.08 of its total potential returns per unit of risk. Delek Logistics Partners is currently generating about 0.19 per unit of volatility. If you would invest 4,099 in Delek Logistics Partners on November 8, 2024 and sell it today you would earn a total of 202.00 from holding Delek Logistics Partners or generate 4.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Ultrapar Participacoes SA vs. Delek Logistics Partners
Performance |
| Timeline |
| Ultrapar Participacoes |
| Delek Logistics Partners |
Ultrapar Participacoes and Delek Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultrapar Participacoes and Delek Logistics
The main advantage of trading using opposite Ultrapar Participacoes and Delek Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultrapar Participacoes 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.| Ultrapar Participacoes vs. Star Gas Partners | Ultrapar Participacoes vs. Par Pacific Holdings | Ultrapar Participacoes vs. Delek Energy | Ultrapar Participacoes vs. Crossamerica Partners LP |
| 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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