Correlation Between Delek and Scope Metals

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

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

Diversification Opportunities for Delek and Scope Metals

0.89

Correlation Coefficient

Delek  Scope Metals

Very poor diversification

The 3 months correlation between Delek and Scope is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Delek Group and Scope Metals Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scope Metals Group 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 Scope Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scope Metals Group has no effect on the direction of Delek i.e., Delek and Scope Metals go up and down completely randomly.

Pair Corralation between Delek and Scope Metals

Assuming the 90 days trading horizon Delek is expected to generate 1.14 times less return on investment than Scope Metals. In addition to that, Delek is 1.0 times more volatile than Scope Metals Group. It trades about 0.29 of its total potential returns per unit of risk. Scope Metals Group is currently generating about 0.33 per unit of volatility. If you would invest  1,166,000  in Scope Metals Group on April 22, 2025 and sell it today you would earn a total of  430,000  from holding Scope Metals Group or generate 36.88% return on investment over 90 days.

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

Delek Group  vs.  Scope Metals Group

Delek Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Delek Group are ranked lower than 22 (%) 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.

Scope Metals Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Scope Metals Group are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Scope Metals sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Delek and Scope Metals

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

The idea behind Delek Group and Scope Metals Group 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.