Correlation Between Delek Logistics and Ultrapar Participacoes
Can any of the company-specific risk be diversified away by investing in both Delek Logistics and Ultrapar Participacoes 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 Logistics and Ultrapar Participacoes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delek Logistics Partners and Ultrapar Participacoes SA, you can compare the effects of market volatilities on Delek Logistics and Ultrapar Participacoes 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 Logistics with a short position of Ultrapar Participacoes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek Logistics and Ultrapar Participacoes.
Diversification Opportunities for Delek Logistics and Ultrapar Participacoes
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Delek and Ultrapar is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Delek Logistics Partners and Ultrapar Participacoes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultrapar Participacoes and Delek Logistics 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 Logistics Partners are associated (or correlated) with Ultrapar Participacoes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultrapar Participacoes has no effect on the direction of Delek Logistics i.e., Delek Logistics and Ultrapar Participacoes go up and down completely randomly.
Pair Corralation between Delek Logistics and Ultrapar Participacoes
Considering the 90-day investment horizon Delek Logistics Partners is expected to generate 0.81 times more return on investment than Ultrapar Participacoes. However, Delek Logistics Partners is 1.23 times less risky than Ultrapar Participacoes. It trades about 0.01 of its potential returns per unit of risk. Ultrapar Participacoes SA is currently generating about -0.22 per unit of risk. If you would invest 3,990 in Delek Logistics Partners on September 7, 2024 and sell it today you would lose (10.00) from holding Delek Logistics Partners or give up 0.25% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Delek Logistics Partners vs. Ultrapar Participacoes SA
Performance |
Timeline |
Delek Logistics Partners |
Ultrapar Participacoes |
Delek Logistics and Ultrapar Participacoes Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Delek Logistics and Ultrapar Participacoes
The main advantage of trading using opposite Delek Logistics and Ultrapar Participacoes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delek Logistics position performs unexpectedly, Ultrapar Participacoes 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 Ultrapar Participacoes will offset losses from the drop in Ultrapar Participacoes' long position.Delek Logistics vs. CVR Energy | Delek Logistics vs. PBF Energy | Delek Logistics vs. HF Sinclair Corp | Delek Logistics vs. Par Pacific Holdings |
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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.
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