Correlation Between Delek and Intercure

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

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

Diversification Opportunities for Delek and Intercure

-0.86

Correlation Coefficient

Delek  Intercure

Pay attention - limited upside

The 3 months correlation between Delek and Intercure is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Delek Group and Intercure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intercure 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 Intercure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intercure has no effect on the direction of Delek i.e., Delek and Intercure go up and down completely randomly.

Pair Corralation between Delek and Intercure

Assuming the 90 days trading horizon Delek Group is expected to generate 0.38 times more return on investment than Intercure. However, Delek Group is 2.65 times less risky than Intercure. It trades about 0.24 of its potential returns per unit of risk. Intercure is currently generating about -0.04 per unit of risk. If you would invest  3,954,610  in Delek Group on September 26, 2024 and sell it today you would earn a total of  818,390  from holding Delek Group or generate 20.69% return on investment over 90 days.

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

Delek Group  vs.  Intercure

Delek Group

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Delek Group are ranked lower than 18 (%) 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.

Intercure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intercure has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Delek and Intercure

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

The idea behind Delek Group and Intercure 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.