Correlation Between Delek and Norstar

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

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

Diversification Opportunities for Delek and Norstar

0.0

Correlation Coefficient

Delek  Norstar

Pay attention - limited upside

The 3 months correlation between Delek and Norstar is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Delek Group and Norstar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norstar 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 Norstar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norstar has no effect on the direction of Delek i.e., Delek and Norstar go up and down completely randomly.

Pair Corralation between Delek and Norstar

If you would invest  3,613,135  in Delek Group on September 14, 2024 and sell it today you would earn a total of  1,080,865  from holding Delek Group or generate 29.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Delek Group  vs.  Norstar

Delek Group

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Delek Group are ranked lower than 20 (%) 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.

Norstar

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Norstar has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Norstar is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Delek and Norstar

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

The idea behind Delek Group and Norstar 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.