Correlation Between Delek and Neto Malinda

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

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

Diversification Opportunities for Delek and Neto Malinda

0.15

Correlation Coefficient

Delek  Neto Malinda

Average diversification

The 3 months correlation between Delek and Neto is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Delek Group and Neto Malinda in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neto Malinda 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 Neto Malinda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neto Malinda has no effect on the direction of Delek i.e., Delek and Neto Malinda go up and down completely randomly.

Pair Corralation between Delek and Neto Malinda

Assuming the 90 days trading horizon Delek is expected to generate 7.51 times less return on investment than Neto Malinda. But when comparing it to its historical volatility, Delek Group is 2.04 times less risky than Neto Malinda. It trades about 0.06 of its potential returns per unit of risk. Neto Malinda is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  756,382  in Neto Malinda on September 25, 2024 and sell it today you would earn a total of  66,218  from holding Neto Malinda or generate 8.75% return on investment over 90 days.

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

Delek Group  vs.  Neto Malinda

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.

Neto Malinda

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Neto Malinda are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Neto Malinda sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Delek and Neto Malinda

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

The idea behind Delek Group and Neto Malinda 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.