Correlation Between Amgen and Delek Logistics

Can any of the company-specific risk be diversified away by investing in both Amgen 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 Amgen and Delek Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amgen Inc and Delek Logistics Partners, you can compare the effects of market volatilities on Amgen 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 Amgen with a short position of Delek Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and Delek Logistics.

Diversification Opportunities for Amgen and Delek Logistics

-0.01

Correlation Coefficient

Amgen  Delek Logistics

Good diversification

The 3 months correlation between Amgen and Delek is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc 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 Amgen 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 Amgen Inc 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 Amgen i.e., Amgen and Delek Logistics go up and down completely randomly.

Pair Corralation between Amgen and Delek Logistics

Given the investment horizon of 90 days Amgen Inc is expected to under-perform the Delek Logistics. In addition to that, Amgen is 1.72 times more volatile than Delek Logistics Partners. It trades about -0.36 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  3,959  in Delek Logistics Partners on September 25, 2024 and sell it today you would earn a total of  130.00  from holding Delek Logistics Partners or generate 3.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Amgen Inc  vs.  Delek Logistics Partners

Amgen Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amgen Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Delek Logistics Partners

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Delek Logistics Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Delek Logistics is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Amgen and Delek Logistics

The main advantage of trading using opposite Amgen and Delek Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen 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.

The idea behind Amgen Inc and Delek Logistics Partners 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.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.