Correlation Between Delek and Kardan Real

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

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

Diversification Opportunities for Delek and Kardan Real

0.91

Correlation Coefficient

Delek  Kardan Real

Almost no diversification

The 3 months correlation between Delek and Kardan is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Delek Group and Kardan Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kardan Real Estate 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 Kardan Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kardan Real Estate has no effect on the direction of Delek i.e., Delek and Kardan Real go up and down completely randomly.

Pair Corralation between Delek and Kardan Real

Assuming the 90 days trading horizon Delek is expected to generate 2.96 times less return on investment than Kardan Real. But when comparing it to its historical volatility, Delek Group is 2.41 times less risky than Kardan Real. It trades about 0.06 of its potential returns per unit of risk. Kardan Real Estate is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  52,840  in Kardan Real Estate on September 25, 2024 and sell it today you would earn a total of  1,560  from holding Kardan Real Estate or generate 2.95% return on investment over 90 days.

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

Delek Group  vs.  Kardan Real Estate

Delek Group

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Delek Group are ranked lower than 19 (%) 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.

Kardan Real Estate

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kardan Real Estate are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kardan Real sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Delek and Kardan Real

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

The idea behind Delek Group and Kardan Real Estate 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.