Correlation Between San Juan and Delek Drilling
Can any of the company-specific risk be diversified away by investing in both San Juan 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 San Juan and Delek Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between San Juan Basin and Delek Drilling , you can compare the effects of market volatilities on San Juan 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 San Juan with a short position of Delek Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of San Juan and Delek Drilling.
Diversification Opportunities for San Juan and Delek Drilling
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between San and Delek is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding San Juan Basin and Delek Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Drilling and San Juan 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 San Juan Basin 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 San Juan i.e., San Juan and Delek Drilling go up and down completely randomly.
Pair Corralation between San Juan and Delek Drilling
Considering the 90-day investment horizon San Juan Basin is expected to generate 2.22 times more return on investment than Delek Drilling. However, San Juan is 2.22 times more volatile than Delek Drilling . It trades about 0.17 of its potential returns per unit of risk. Delek Drilling is currently generating about 0.18 per unit of risk. If you would invest 388.00 in San Juan Basin on September 5, 2024 and sell it today you would earn a total of 45.00 from holding San Juan Basin or generate 11.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 86.36% |
| Values | Daily Returns |
San Juan Basin vs. Delek Drilling
Performance |
| Timeline |
| San Juan Basin |
| Delek Drilling |
San Juan and Delek Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with San Juan and Delek Drilling
The main advantage of trading using opposite San Juan and Delek Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if San Juan 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.| San Juan vs. Evolution Petroleum | San Juan vs. Ring Energy | San Juan vs. Gran Tierra Energy | San Juan vs. PEDEVCO Corp |
| 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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