Correlation Between Coterra Energy and Delek Drilling
Can any of the company-specific risk be diversified away by investing in both Coterra Energy 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 Coterra Energy and Delek Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coterra Energy and Delek Drilling , you can compare the effects of market volatilities on Coterra Energy 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 Coterra Energy with a short position of Delek Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coterra Energy and Delek Drilling.
Diversification Opportunities for Coterra Energy and Delek Drilling
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Coterra and Delek is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Coterra Energy and Delek Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Drilling and Coterra Energy 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 Coterra Energy 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 Coterra Energy i.e., Coterra Energy and Delek Drilling go up and down completely randomly.
Pair Corralation between Coterra Energy and Delek Drilling
Given the investment horizon of 90 days Coterra Energy is expected to generate 2.76 times more return on investment than Delek Drilling. However, Coterra Energy is 2.76 times more volatile than Delek Drilling . It trades about 0.79 of its potential returns per unit of risk. Delek Drilling is currently generating about 0.3 per unit of risk. If you would invest 2,367 in Coterra Energy on October 20, 2024 and sell it today you would earn a total of 580.00 from holding Coterra Energy or generate 24.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Coterra Energy vs. Delek Drilling
Performance |
| Timeline |
| Coterra Energy |
| Delek Drilling |
Coterra Energy and Delek Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coterra Energy and Delek Drilling
The main advantage of trading using opposite Coterra Energy and Delek Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coterra Energy 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.| Coterra Energy vs. Devon Energy | Coterra Energy vs. Diamondback Energy | Coterra Energy vs. EOG Resources | Coterra Energy vs. ConocoPhillips |
| 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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