Correlation Between Kontoor Brands and Delek Drilling
Can any of the company-specific risk be diversified away by investing in both Kontoor Brands 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 Kontoor Brands and Delek Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kontoor Brands and Delek Drilling , you can compare the effects of market volatilities on Kontoor Brands 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 Kontoor Brands with a short position of Delek Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kontoor Brands and Delek Drilling.
Diversification Opportunities for Kontoor Brands and Delek Drilling
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kontoor and Delek is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Kontoor Brands and Delek Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Drilling and Kontoor Brands 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 Kontoor Brands 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 Kontoor Brands i.e., Kontoor Brands and Delek Drilling go up and down completely randomly.
Pair Corralation between Kontoor Brands and Delek Drilling
Considering the 90-day investment horizon Kontoor Brands is expected to generate 1.51 times less return on investment than Delek Drilling. But when comparing it to its historical volatility, Kontoor Brands is 2.58 times less risky than Delek Drilling. It trades about 0.08 of its potential returns per unit of risk. Delek Drilling is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 215.00 in Delek Drilling on September 3, 2024 and sell it today you would earn a total of 96.00 from holding Delek Drilling or generate 44.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 67.27% |
| Values | Daily Returns |
Kontoor Brands vs. Delek Drilling
Performance |
| Timeline |
| Kontoor Brands |
| Delek Drilling |
Kontoor Brands and Delek Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kontoor Brands and Delek Drilling
The main advantage of trading using opposite Kontoor Brands and Delek Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kontoor Brands 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.| Kontoor Brands vs. Vince Holding Corp | Kontoor Brands vs. Ermenegildo Zegna NV | Kontoor Brands vs. Columbia Sportswear | Kontoor Brands vs. Gildan Activewear |
| 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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |