Correlation Between Nabors Industries and Delek Drilling

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

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

Diversification Opportunities for Nabors Industries and Delek Drilling

-0.62

Correlation Coefficient

Nabors Industries  Delek Drilling

Excellent diversification

The 3 months correlation between Nabors and Delek is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Nabors Industries and Delek Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Drilling and Nabors Industries 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 Nabors Industries 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 Nabors Industries i.e., Nabors Industries and Delek Drilling go up and down completely randomly.

Pair Corralation between Nabors Industries and Delek Drilling

Considering the 90-day investment horizon Nabors Industries is expected to under-perform the Delek Drilling. In addition to that, Nabors Industries is 1.84 times more volatile than Delek Drilling . It trades about -0.09 of its total potential returns per unit of risk. Delek Drilling is currently generating about 0.07 per unit of volatility. If you would invest  327.00  in Delek Drilling on December 28, 2024 and sell it today you would earn a total of  25.00  from holding Delek Drilling or generate 7.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.83%
Values	Daily Returns

Nabors Industries  vs.  Delek Drilling

Nabors Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nabors Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's fundamental drivers remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Delek Drilling

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Delek Drilling are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Delek Drilling may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Nabors Industries and Delek Drilling

The main advantage of trading using opposite Nabors Industries and Delek Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nabors Industries 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 Nabors Industries 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.

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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..