Correlation Between Delek Logistics and USA Compression

Can any of the company-specific risk be diversified away by investing in both Delek Logistics and USA Compression 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 USA Compression 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 USA Compression Partners, you can compare the effects of market volatilities on Delek Logistics and USA Compression 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 USA Compression. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek Logistics and USA Compression.

Diversification Opportunities for Delek Logistics and USA Compression

0.23

Correlation Coefficient

Delek Logistics  USA Compression

Modest diversification

The 3 months correlation between Delek and USA is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Delek Logistics Partners and USA Compression Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USA Compression Partners 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 USA Compression. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USA Compression Partners has no effect on the direction of Delek Logistics i.e., Delek Logistics and USA Compression go up and down completely randomly.

Pair Corralation between Delek Logistics and USA Compression

Considering the 90-day investment horizon Delek Logistics Partners is expected to generate 0.98 times more return on investment than USA Compression. However, Delek Logistics Partners is 1.02 times less risky than USA Compression. It trades about 0.22 of its potential returns per unit of risk. USA Compression Partners is currently generating about 0.05 per unit of risk. If you would invest  3,790  in Delek Logistics Partners on May 7, 2025 and sell it today you would earn a total of  718.00  from holding Delek Logistics Partners or generate 18.94% return on investment over 90 days.

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

Delek Logistics Partners  vs.  USA Compression Partners

Delek Logistics Partners

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Delek Logistics Partners are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent forward-looking signals, Delek Logistics disclosed solid returns over the last few months and may actually be approaching a breakup point.

USA Compression Partners

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in USA Compression Partners are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, USA Compression is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Delek Logistics and USA Compression

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

The idea behind Delek Logistics Partners and USA Compression Partners 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.