Correlation Between Delek Drilling and Gap,

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

By analyzing existing cross correlation between Delek Drilling and The Gap,, you can compare the effects of market volatilities on Delek Drilling and Gap, 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 Gap,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek Drilling and Gap,.

Diversification Opportunities for Delek Drilling and Gap,

0.63

Correlation Coefficient

Delek Drilling  Gap,

Poor diversification

The 3 months correlation between Delek and Gap, is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Delek Drilling and The Gap, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gap, 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 Gap,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gap, has no effect on the direction of Delek Drilling i.e., Delek Drilling and Gap, go up and down completely randomly.

Pair Corralation between Delek Drilling and Gap,

Assuming the 90 days horizon Delek Drilling is expected to generate 1.17 times less return on investment than Gap,. But when comparing it to its historical volatility, Delek Drilling is 1.09 times less risky than Gap,. It trades about 0.11 of its potential returns per unit of risk. The Gap, is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  2,026  in The Gap, on September 15, 2024 and sell it today you would earn a total of  403.00  from holding The Gap, or generate 19.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Delek Drilling   vs.  The Gap,

Delek Drilling

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Delek Drilling are ranked lower than 8 (%) 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.

Gap,

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Gap, are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Gap, reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Delek Drilling and Gap,

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

The idea behind Delek Drilling and The Gap, 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.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.