Correlation Between Delek Drilling and Sweetgreen

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

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

Diversification Opportunities for Delek Drilling and Sweetgreen

0.24

Correlation Coefficient

Delek Drilling  Sweetgreen

Modest diversification

The 3 months correlation between Delek and Sweetgreen is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Delek Drilling and Sweetgreen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sweetgreen 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 Sweetgreen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sweetgreen has no effect on the direction of Delek Drilling i.e., Delek Drilling and Sweetgreen go up and down completely randomly.

Pair Corralation between Delek Drilling and Sweetgreen

Assuming the 90 days horizon Delek Drilling is expected to generate 1.38 times less return on investment than Sweetgreen. In addition to that, Delek Drilling is 1.24 times more volatile than Sweetgreen. It trades about 0.05 of its total potential returns per unit of risk. Sweetgreen is currently generating about 0.08 per unit of volatility. If you would invest  865.00  in Sweetgreen on September 24, 2024 and sell it today you would earn a total of  2,645  from holding Sweetgreen or generate 305.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	68.07%
Values	Daily Returns

Delek Drilling   vs.  Sweetgreen

Delek Drilling

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Delek Drilling are ranked lower than 14 (%) 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.

Sweetgreen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sweetgreen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Sweetgreen is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Delek Drilling and Sweetgreen

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

The idea behind Delek Drilling and Sweetgreen 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.