Correlation Between Delek Drilling and National CineMedia
Can any of the company-specific risk be diversified away by investing in both Delek Drilling and National CineMedia 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 National CineMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delek Drilling and National CineMedia, you can compare the effects of market volatilities on Delek Drilling and National CineMedia 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 National CineMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek Drilling and National CineMedia.
Diversification Opportunities for Delek Drilling and National CineMedia
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Delek and National is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Delek Drilling and National CineMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National CineMedia 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 National CineMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National CineMedia has no effect on the direction of Delek Drilling i.e., Delek Drilling and National CineMedia go up and down completely randomly.
Pair Corralation between Delek Drilling and National CineMedia
Assuming the 90 days horizon Delek Drilling is expected to generate 1.22 times more return on investment than National CineMedia. However, Delek Drilling is 1.22 times more volatile than National CineMedia. It trades about 0.14 of its potential returns per unit of risk. National CineMedia is currently generating about 0.08 per unit of risk. If you would invest 234.00 in Delek Drilling on November 9, 2024 and sell it today you would earn a total of 151.00 from holding Delek Drilling or generate 64.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 38.58% |
| Values | Daily Returns |
Delek Drilling vs. National CineMedia
Performance |
| Timeline |
| Delek Drilling |
| National CineMedia |
Delek Drilling and National CineMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delek Drilling and National CineMedia
The main advantage of trading using opposite Delek Drilling and National CineMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delek Drilling position performs unexpectedly, National CineMedia 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 National CineMedia will offset losses from the drop in National CineMedia's long position.| Delek Drilling vs. Permian Resources | Delek Drilling vs. Devon Energy | Delek Drilling vs. EOG Resources | Delek Drilling vs. Coterra Energy |
| National CineMedia vs. MGO Global Common | National CineMedia vs. Baosheng Media Group | National CineMedia vs. Glory Star New | National CineMedia vs. Impact Fusion International |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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