Correlation Between AKITA Drilling and Delek Drilling
Can any of the company-specific risk be diversified away by investing in both AKITA Drilling and Delek Drilling 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 AKITA Drilling and Delek Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AKITA Drilling and Delek Drilling , you can compare the effects of market volatilities on AKITA Drilling and Delek Drilling 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 AKITA Drilling with a short position of Delek Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKITA Drilling and Delek Drilling.
Diversification Opportunities for AKITA Drilling and Delek Drilling
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AKITA and Delek is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding AKITA Drilling and Delek Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Drilling and AKITA Drilling 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 AKITA Drilling are associated (or correlated) with Delek Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Drilling has no effect on the direction of AKITA Drilling i.e., AKITA Drilling and Delek Drilling go up and down completely randomly.
Pair Corralation between AKITA Drilling and Delek Drilling
Assuming the 90 days horizon AKITA Drilling is expected to generate 1.45 times less return on investment than Delek Drilling. But when comparing it to its historical volatility, AKITA Drilling is 1.17 times less risky than Delek Drilling. It trades about 0.04 of its potential returns per unit of risk. Delek Drilling is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 263.00 in Delek Drilling on August 24, 2024 and sell it today you would earn a total of 46.00 from holding Delek Drilling or generate 17.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 61.04% |
| Values | Daily Returns |
AKITA Drilling vs. Delek Drilling
Performance |
| Timeline |
| AKITA Drilling |
| Delek Drilling |
AKITA Drilling and Delek Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AKITA Drilling and Delek Drilling
The main advantage of trading using opposite AKITA Drilling and Delek Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKITA Drilling position performs unexpectedly, Delek Drilling 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 Drilling will offset losses from the drop in Delek Drilling's long position.| AKITA Drilling vs. Cathedral Energy Services | AKITA Drilling vs. Vantage Drilling International | AKITA Drilling vs. Seadrill Limited | AKITA Drilling vs. Noble plc |
| Delek Drilling vs. Permian Resources | Delek Drilling vs. Devon Energy | Delek Drilling vs. EOG Resources | Delek Drilling vs. Coterra Energy |
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 Stocks Directory module to find actively traded stocks across global markets.
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