Correlation Between Doubledown Interactive and Delek Drilling

Can any of the company-specific risk be diversified away by investing in both Doubledown Interactive 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 Doubledown Interactive and Delek Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Doubledown Interactive Co and Delek Drilling , you can compare the effects of market volatilities on Doubledown Interactive 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 Doubledown Interactive with a short position of Delek Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doubledown Interactive and Delek Drilling.

Diversification Opportunities for Doubledown Interactive and Delek Drilling

-0.55

Correlation Coefficient

Doubledown Interactive  Delek Drilling

Excellent diversification

The 3 months correlation between Doubledown and Delek is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Doubledown Interactive Co and Delek Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Drilling and Doubledown Interactive 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 Doubledown Interactive 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 Doubledown Interactive i.e., Doubledown Interactive and Delek Drilling go up and down completely randomly.

Pair Corralation between Doubledown Interactive and Delek Drilling

Considering the 90-day investment horizon Doubledown Interactive Co is expected to under-perform the Delek Drilling. In addition to that, Doubledown Interactive is 1.27 times more volatile than Delek Drilling . It trades about -0.17 of its total potential returns per unit of risk. Delek Drilling is currently generating about 0.17 per unit of volatility. If you would invest  255.00  in Delek Drilling on October 3, 2024 and sell it today you would earn a total of  72.00  from holding Delek Drilling or generate 28.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Doubledown Interactive Co  vs.  Delek Drilling

Doubledown Interactive

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Doubledown Interactive Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Delek Drilling

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Delek Drilling are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting basic indicators, Delek Drilling reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Doubledown Interactive and Delek Drilling

The main advantage of trading using opposite Doubledown Interactive and Delek Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Doubledown Interactive 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.

The idea behind Doubledown Interactive Co and Delek Drilling pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.