Correlation Between Delek Drilling and ZenaTech

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

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

Diversification Opportunities for Delek Drilling and ZenaTech

-0.87

Correlation Coefficient

Delek Drilling  ZenaTech

Pay attention - limited upside

The 3 months correlation between Delek and ZenaTech is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Delek Drilling and ZenaTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZenaTech 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 ZenaTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZenaTech has no effect on the direction of Delek Drilling i.e., Delek Drilling and ZenaTech go up and down completely randomly.

Pair Corralation between Delek Drilling and ZenaTech

Assuming the 90 days horizon Delek Drilling is expected to generate 0.17 times more return on investment than ZenaTech. However, Delek Drilling is 5.75 times less risky than ZenaTech. It trades about 0.11 of its potential returns per unit of risk. ZenaTech is currently generating about -0.09 per unit of risk. If you would invest  327.00  in Delek Drilling on December 20, 2024 and sell it today you would earn a total of  43.00  from holding Delek Drilling or generate 13.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Delek Drilling   vs.  ZenaTech

Delek Drilling

Risk-Adjusted Performance

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.

ZenaTech

Risk-Adjusted Performance

Very Weak

Over the last 90 days ZenaTech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Delek Drilling and ZenaTech

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

The idea behind Delek Drilling and ZenaTech 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.