Correlation Between Delek Drilling and ChampionX
Can any of the company-specific risk be diversified away by investing in both Delek Drilling and ChampionX 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 Drilling and ChampionX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delek Drilling and ChampionX, you can compare the effects of market volatilities on Delek Drilling and ChampionX 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 Drilling with a short position of ChampionX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek Drilling and ChampionX.
Diversification Opportunities for Delek Drilling and ChampionX
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Delek and ChampionX is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Delek Drilling and ChampionX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChampionX and Delek 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 Delek Drilling are associated (or correlated) with ChampionX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChampionX has no effect on the direction of Delek Drilling i.e., Delek Drilling and ChampionX go up and down completely randomly.
Pair Corralation between Delek Drilling and ChampionX
Assuming the 90 days horizon Delek Drilling is expected to generate 2.78 times more return on investment than ChampionX. However, Delek Drilling is 2.78 times more volatile than ChampionX. It trades about 0.05 of its potential returns per unit of risk. ChampionX is currently generating about 0.02 per unit of risk. If you would invest 205.00 in Delek Drilling on September 14, 2024 and sell it today you would earn a total of 100.00 from holding Delek Drilling or generate 48.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 68.02% |
| Values | Daily Returns |
Delek Drilling vs. ChampionX
Performance |
| Timeline |
| Delek Drilling |
| ChampionX |
Delek Drilling and ChampionX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delek Drilling and ChampionX
The main advantage of trading using opposite Delek Drilling and ChampionX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delek Drilling position performs unexpectedly, ChampionX 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 ChampionX will offset losses from the drop in ChampionX's long position.| Delek Drilling vs. Permian Resources | Delek Drilling vs. Devon Energy | Delek Drilling vs. EOG Resources | Delek Drilling vs. Coterra Energy |
| ChampionX vs. Expro Group Holdings | ChampionX vs. Ranger Energy Services | ChampionX vs. Cactus Inc | ChampionX vs. MRC Global |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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