Correlation Between Delek and Alony Hetz

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

By analyzing existing cross correlation between Delek Group and Alony Hetz Properties, you can compare the effects of market volatilities on Delek and Alony Hetz 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 Alony Hetz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek and Alony Hetz.

Diversification Opportunities for Delek and Alony Hetz

0.85

Correlation Coefficient

Delek  Alony Hetz

Very poor diversification

The 3 months correlation between Delek and Alony is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Delek Group and Alony Hetz Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alony Hetz Properties 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 Alony Hetz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alony Hetz Properties has no effect on the direction of Delek i.e., Delek and Alony Hetz go up and down completely randomly.

Pair Corralation between Delek and Alony Hetz

Assuming the 90 days trading horizon Delek Group is expected to under-perform the Alony Hetz. But the stock apears to be less risky and, when comparing its historical volatility, Delek Group is 3.27 times less risky than Alony Hetz. The stock trades about -0.16 of its potential returns per unit of risk. The Alony Hetz Properties is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  290,321  in Alony Hetz Properties on September 24, 2024 and sell it today you would earn a total of  13,179  from holding Alony Hetz Properties or generate 4.54% 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.  Alony Hetz Properties

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.

Alony Hetz Properties

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alony Hetz Properties are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Alony Hetz sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Delek and Alony Hetz

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

The idea behind Delek Group and Alony Hetz Properties 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.