Correlation Between Delek Logistics and Saia

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

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

Diversification Opportunities for Delek Logistics and Saia

-0.28

Correlation Coefficient

Delek Logistics  Saia

Very good diversification

The 3 months correlation between Delek and Saia is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Delek Logistics Partners and Saia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saia Inc and Delek Logistics 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 Delek Logistics Partners are associated (or correlated) with Saia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saia Inc has no effect on the direction of Delek Logistics i.e., Delek Logistics and Saia go up and down completely randomly.

Pair Corralation between Delek Logistics and Saia

Considering the 90-day investment horizon Delek Logistics Partners is expected to under-perform the Saia. But the stock apears to be less risky and, when comparing its historical volatility, Delek Logistics Partners is 1.78 times less risky than Saia. The stock trades about -0.05 of its potential returns per unit of risk. The Saia Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  44,154  in Saia Inc on September 21, 2024 and sell it today you would earn a total of  5,339  from holding Saia Inc or generate 12.09% return on investment over 90 days.

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

Delek Logistics Partners  vs.  Saia Inc

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.

Saia Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Saia Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating forward indicators, Saia sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Delek Logistics and Saia

The main advantage of trading using opposite Delek Logistics and Saia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delek Logistics position performs unexpectedly, Saia 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 Saia will offset losses from the drop in Saia's long position.

The idea behind Delek Logistics Partners and Saia Inc 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.

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.