Correlation Between Delek and Multi Retail

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

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

Diversification Opportunities for Delek and Multi Retail

0.89

Correlation Coefficient

Delek  Multi Retail

Very poor diversification

The 3 months correlation between Delek and Multi is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Delek Group and Multi Retail Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Retail Group 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 Multi Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Retail Group has no effect on the direction of Delek i.e., Delek and Multi Retail go up and down completely randomly.

Pair Corralation between Delek and Multi Retail

Assuming the 90 days trading horizon Delek is expected to generate 2.83 times less return on investment than Multi Retail. But when comparing it to its historical volatility, Delek Group is 2.44 times less risky than Multi Retail. It trades about 0.06 of its potential returns per unit of risk. Multi Retail Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  110,900  in Multi Retail Group on September 25, 2024 and sell it today you would earn a total of  3,100  from holding Multi Retail Group or generate 2.8% 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.  Multi Retail Group

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.

Multi Retail Group

Risk-Adjusted Performance

28 of 100

Strong

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

Pair Trading with Delek and Multi Retail

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

The idea behind Delek Group and Multi Retail Group 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.