Correlation Between Mediag3 and Delek Drilling

Can any of the company-specific risk be diversified away by investing in both Mediag3 and Delek Drilling 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 Mediag3 and Delek Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mediag3 and Delek Drilling , you can compare the effects of market volatilities on Mediag3 and Delek Drilling 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 Mediag3 with a short position of Delek Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mediag3 and Delek Drilling.

Diversification Opportunities for Mediag3 and Delek Drilling

0.0

Correlation Coefficient

Mediag3  Delek Drilling

Pay attention - limited upside

The 3 months correlation between Mediag3 and Delek is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mediag3 and Delek Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Drilling and Mediag3 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 Mediag3 are associated (or correlated) with Delek Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Drilling has no effect on the direction of Mediag3 i.e., Mediag3 and Delek Drilling go up and down completely randomly.

Pair Corralation between Mediag3 and Delek Drilling

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	Flat
Strength	Insignificant
Accuracy	93.65%
Values	Daily Returns

Mediag3  vs.  Delek Drilling

Mediag3

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mediag3 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Mediag3 is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

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.

Pair Trading with Mediag3 and Delek Drilling

The main advantage of trading using opposite Mediag3 and Delek Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mediag3 position performs unexpectedly, Delek Drilling 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 Delek Drilling will offset losses from the drop in Delek Drilling's long position.

The idea behind Mediag3 and Delek Drilling 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.