Correlation Between Devon Energy and Delek
Can any of the company-specific risk be diversified away by investing in both Devon Energy and Delek 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 Devon Energy and Delek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Devon Energy and Delek Group, you can compare the effects of market volatilities on Devon Energy and Delek 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 Devon Energy with a short position of Delek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Devon Energy and Delek.
Diversification Opportunities for Devon Energy and Delek
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Devon and Delek is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Devon Energy and Delek Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Group and Devon 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 Devon Energy are associated (or correlated) with Delek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Group has no effect on the direction of Devon Energy i.e., Devon Energy and Delek go up and down completely randomly.
Pair Corralation between Devon Energy and Delek
Considering the 90-day investment horizon Devon Energy is expected to under-perform the Delek. But the stock apears to be less risky and, when comparing its historical volatility, Devon Energy is 1.53 times less risky than Delek. The stock trades about -0.02 of its potential returns per unit of risk. The Delek Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,005 in Delek Group on August 31, 2024 and sell it today you would earn a total of 313.00 from holding Delek Group or generate 31.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Devon Energy vs. Delek Group
Performance |
| Timeline |
| Devon Energy |
| Delek Group |
Devon Energy and Delek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Devon Energy and Delek
The main advantage of trading using opposite Devon Energy and Delek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Devon Energy position performs unexpectedly, Delek 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 will offset losses from the drop in Delek's long position.| Devon Energy vs. Coterra Energy | Devon Energy vs. Diamondback Energy | Devon Energy vs. EOG Resources | Devon Energy vs. ConocoPhillips |
| Delek vs. Valeura Energy | Delek vs. Gulf Keystone Petroleum | Delek vs. Inpex Corp ADR | Delek vs. Spartan Delta Corp |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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