Correlation Between Victorias Secret and Delek Drilling
Can any of the company-specific risk be diversified away by investing in both Victorias Secret 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 Victorias Secret and Delek Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victorias Secret Co and Delek Drilling , you can compare the effects of market volatilities on Victorias Secret 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 Victorias Secret with a short position of Delek Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victorias Secret and Delek Drilling.
Diversification Opportunities for Victorias Secret and Delek Drilling
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Victorias and Delek is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Victorias Secret Co and Delek Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Drilling and Victorias Secret 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 Victorias Secret Co 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 Victorias Secret i.e., Victorias Secret and Delek Drilling go up and down completely randomly.
Pair Corralation between Victorias Secret and Delek Drilling
Given the investment horizon of 90 days Victorias Secret is expected to generate 4.69 times less return on investment than Delek Drilling. But when comparing it to its historical volatility, Victorias Secret Co is 1.58 times less risky than Delek Drilling. It trades about 0.02 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 | Strong |
| Accuracy | 67.27% |
| Values | Daily Returns |
Victorias Secret Co vs. Delek Drilling
Performance |
| Timeline |
| Victorias Secret |
| Delek Drilling |
Victorias Secret and Delek Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victorias Secret and Delek Drilling
The main advantage of trading using opposite Victorias Secret and Delek Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victorias Secret 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.| Victorias Secret vs. Ross Stores | Victorias Secret vs. Childrens Place | Victorias Secret vs. Buckle Inc | Victorias Secret vs. Guess Inc |
| 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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