Correlation Between Galileo Tech and Delek Automotive

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

By analyzing existing cross correlation between Galileo Tech and Delek Automotive Systems, you can compare the effects of market volatilities on Galileo Tech and Delek Automotive 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 Galileo Tech with a short position of Delek Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galileo Tech and Delek Automotive.

Diversification Opportunities for Galileo Tech and Delek Automotive

-0.82

Correlation Coefficient

Galileo Tech  Delek Automotive

Pay attention - limited upside

The 3 months correlation between Galileo and Delek is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Galileo Tech and Delek Automotive Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Automotive Systems and Galileo Tech 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 Galileo Tech are associated (or correlated) with Delek Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Automotive Systems has no effect on the direction of Galileo Tech i.e., Galileo Tech and Delek Automotive go up and down completely randomly.

Pair Corralation between Galileo Tech and Delek Automotive

Assuming the 90 days trading horizon Galileo Tech is expected to under-perform the Delek Automotive. In addition to that, Galileo Tech is 2.74 times more volatile than Delek Automotive Systems. It trades about -0.04 of its total potential returns per unit of risk. Delek Automotive Systems is currently generating about 0.12 per unit of volatility. If you would invest  205,000  in Delek Automotive Systems on September 18, 2024 and sell it today you would earn a total of  72,100  from holding Delek Automotive Systems or generate 35.17% return on investment over 90 days.

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

Galileo Tech  vs.  Delek Automotive Systems

Galileo Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Galileo Tech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Delek Automotive Systems

Risk-Adjusted Performance

26 of 100

Solid

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

Pair Trading with Galileo Tech and Delek Automotive

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

The idea behind Galileo Tech and Delek Automotive Systems 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.