Correlation Between Delek Drilling and GetSwift Technologies

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

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

Diversification Opportunities for Delek Drilling and GetSwift Technologies

0.0

Correlation Coefficient

Delek Drilling  GetSwift Technologies

Pay attention - limited upside

The 3 months correlation between Delek and GetSwift is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Delek Drilling and GetSwift Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GetSwift Technologies 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 GetSwift Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GetSwift Technologies has no effect on the direction of Delek Drilling i.e., Delek Drilling and GetSwift Technologies go up and down completely randomly.

Pair Corralation between Delek Drilling and GetSwift Technologies

Assuming the 90 days horizon Delek Drilling is expected to generate 16.88 times less return on investment than GetSwift Technologies. But when comparing it to its historical volatility, Delek Drilling is 6.98 times less risky than GetSwift Technologies. It trades about 0.05 of its potential returns per unit of risk. GetSwift Technologies Limited is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  0.06  in GetSwift Technologies Limited on October 11, 2024 and sell it today you would lose (0.05) from holding GetSwift Technologies Limited or give up 83.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	34.62%
Values	Daily Returns

Delek Drilling   vs.  GetSwift Technologies Limited

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.

GetSwift Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GetSwift Technologies Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, GetSwift Technologies is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Delek Drilling and GetSwift Technologies

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

The idea behind Delek Drilling and GetSwift Technologies Limited 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.