Correlation Between Delek and Trucknet Enterprise

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

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

Diversification Opportunities for Delek and Trucknet Enterprise

0.64

Correlation Coefficient

Delek  Trucknet Enterprise

Poor diversification

The 3 months correlation between Delek and Trucknet is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Delek Group and Trucknet Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trucknet Enterprise 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 Trucknet Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trucknet Enterprise has no effect on the direction of Delek i.e., Delek and Trucknet Enterprise go up and down completely randomly.

Pair Corralation between Delek and Trucknet Enterprise

Assuming the 90 days trading horizon Delek is expected to generate 2.6 times less return on investment than Trucknet Enterprise. But when comparing it to its historical volatility, Delek Group is 2.76 times less risky than Trucknet Enterprise. It trades about 0.15 of its potential returns per unit of risk. Trucknet Enterprise is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  8,880  in Trucknet Enterprise on September 29, 2024 and sell it today you would earn a total of  2,420  from holding Trucknet Enterprise or generate 27.25% return on investment over 90 days.

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

Delek Group  vs.  Trucknet Enterprise

Delek Group

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Delek Group are ranked lower than 12 (%) 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.

Trucknet Enterprise

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Trucknet Enterprise are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Trucknet Enterprise sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Delek and Trucknet Enterprise

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

The idea behind Delek Group and Trucknet Enterprise 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 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.