Correlation Between Delek Drilling and Sable Offshore
Can any of the company-specific risk be diversified away by investing in both Delek Drilling and Sable Offshore 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 Sable Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delek Drilling and Sable Offshore Corp, you can compare the effects of market volatilities on Delek Drilling and Sable Offshore 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 Sable Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek Drilling and Sable Offshore.
Diversification Opportunities for Delek Drilling and Sable Offshore
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Delek and Sable is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Delek Drilling and Sable Offshore Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sable Offshore Corp 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 Sable Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sable Offshore Corp has no effect on the direction of Delek Drilling i.e., Delek Drilling and Sable Offshore go up and down completely randomly.
Pair Corralation between Delek Drilling and Sable Offshore
Assuming the 90 days horizon Delek Drilling is expected to generate 0.31 times more return on investment than Sable Offshore. However, Delek Drilling is 3.23 times less risky than Sable Offshore. It trades about 0.08 of its potential returns per unit of risk. Sable Offshore Corp is currently generating about -0.17 per unit of risk. If you would invest 314.00 in Delek Drilling on September 12, 2024 and sell it today you would earn a total of 6.00 from holding Delek Drilling or generate 1.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Delek Drilling vs. Sable Offshore Corp
Performance |
| Timeline |
| Delek Drilling |
| Sable Offshore Corp |
Delek Drilling and Sable Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delek Drilling and Sable Offshore
The main advantage of trading using opposite Delek Drilling and Sable Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delek Drilling position performs unexpectedly, Sable Offshore 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 Sable Offshore will offset losses from the drop in Sable Offshore's long position.| Delek Drilling vs. Permian Resources | Delek Drilling vs. Devon Energy | Delek Drilling vs. EOG Resources | Delek Drilling vs. Coterra Energy |
| Sable Offshore vs. Stepan Company | Sable Offshore vs. WPP PLC ADR | Sable Offshore vs. Avient Corp | Sable Offshore vs. CF Industries Holdings |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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