Correlation Between Delek Drilling and Summa Silver

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

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

Diversification Opportunities for Delek Drilling and Summa Silver

-0.93

Correlation Coefficient

Delek Drilling  Summa Silver

Pay attention - limited upside

The 3 months correlation between Delek and Summa is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Delek Drilling and Summa Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summa Silver Corp 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 Summa Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summa Silver Corp has no effect on the direction of Delek Drilling i.e., Delek Drilling and Summa Silver go up and down completely randomly.

Pair Corralation between Delek Drilling and Summa Silver

Assuming the 90 days horizon Delek Drilling is expected to generate 1.22 times more return on investment than Summa Silver. However, Delek Drilling is 1.22 times more volatile than Summa Silver Corp. It trades about 0.05 of its potential returns per unit of risk. Summa Silver Corp is currently generating about -0.02 per unit of risk. If you would invest  217.00  in Delek Drilling on October 10, 2024 and sell it today you would earn a total of  110.00  from holding Delek Drilling or generate 50.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	68.28%
Values	Daily Returns

Delek Drilling   vs.  Summa Silver Corp

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.

Summa Silver Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Summa Silver Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Delek Drilling and Summa Silver

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

The idea behind Delek Drilling and Summa Silver Corp 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.