Correlation Between Delek and Adgar Investments

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

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

Diversification Opportunities for Delek and Adgar Investments

0.84

Correlation Coefficient

Delek  Adgar Investments

Very poor diversification

The 3 months correlation between Delek and Adgar is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Delek Group and Adgar Investments and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adgar Investments and Delek 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 Group are associated (or correlated) with Adgar Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adgar Investments has no effect on the direction of Delek i.e., Delek and Adgar Investments go up and down completely randomly.

Pair Corralation between Delek and Adgar Investments

Assuming the 90 days trading horizon Delek is expected to generate 1.55 times less return on investment than Adgar Investments. In addition to that, Delek is 1.07 times more volatile than Adgar Investments and. It trades about 0.22 of its total potential returns per unit of risk. Adgar Investments and is currently generating about 0.36 per unit of volatility. If you would invest  44,410  in Adgar Investments and on September 24, 2024 and sell it today you would earn a total of  13,490  from holding Adgar Investments and or generate 30.38% return on investment over 90 days.

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

Delek Group  vs.  Adgar Investments and

Delek Group

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Delek Group are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Delek unveiled solid returns over the last few months and may actually be approaching a breakup point.

Adgar Investments

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Adgar Investments and are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Adgar Investments sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Delek and Adgar Investments

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

The idea behind Delek Group and Adgar Investments and 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.