Correlation Between Delek Drilling and Eurobank Ergasias

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

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

Diversification Opportunities for Delek Drilling and Eurobank Ergasias

-0.32

Correlation Coefficient

Delek Drilling  Eurobank Ergasias

Very good diversification

The 3 months correlation between Delek and Eurobank is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Delek Drilling and Eurobank Ergasias Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eurobank Ergasias and Delek Drilling 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 Delek Drilling are associated (or correlated) with Eurobank Ergasias. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eurobank Ergasias has no effect on the direction of Delek Drilling i.e., Delek Drilling and Eurobank Ergasias go up and down completely randomly.

Pair Corralation between Delek Drilling and Eurobank Ergasias

Assuming the 90 days horizon Delek Drilling is expected to generate 14.6 times less return on investment than Eurobank Ergasias. But when comparing it to its historical volatility, Delek Drilling is 1.11 times less risky than Eurobank Ergasias. It trades about 0.02 of its potential returns per unit of risk. Eurobank Ergasias Services is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  209.00  in Eurobank Ergasias Services on October 11, 2024 and sell it today you would earn a total of  29.00  from holding Eurobank Ergasias Services or generate 13.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Delek Drilling   vs.  Eurobank Ergasias Services

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 unsteady basic indicators, Delek Drilling reported solid returns over the last few months and may actually be approaching a breakup point.

Eurobank Ergasias

Risk-Adjusted Performance

10 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Eurobank Ergasias Services are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting technical and fundamental indicators, Eurobank Ergasias may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Delek Drilling and Eurobank Ergasias

The main advantage of trading using opposite Delek Drilling and Eurobank Ergasias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delek Drilling position performs unexpectedly, Eurobank Ergasias 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 Eurobank Ergasias will offset losses from the drop in Eurobank Ergasias' long position.

The idea behind Delek Drilling and Eurobank Ergasias Services 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.