Correlation Between Delek Drilling and Entegris

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

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

Diversification Opportunities for Delek Drilling and Entegris

-0.38

Correlation Coefficient

Delek Drilling  Entegris

Very good diversification

The 3 months correlation between Delek and Entegris is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Delek Drilling and Entegris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entegris 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 Entegris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entegris has no effect on the direction of Delek Drilling i.e., Delek Drilling and Entegris go up and down completely randomly.

Pair Corralation between Delek Drilling and Entegris

Assuming the 90 days horizon Delek Drilling is expected to generate 0.97 times more return on investment than Entegris. However, Delek Drilling is 1.04 times less risky than Entegris. It trades about 0.14 of its potential returns per unit of risk. Entegris is currently generating about 0.02 per unit of risk. If you would invest  267.00  in Delek Drilling on September 12, 2024 and sell it today you would earn a total of  58.00  from holding Delek Drilling or generate 21.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Delek Drilling   vs.  Entegris

Delek Drilling

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Delek Drilling are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Delek Drilling reported solid returns over the last few months and may actually be approaching a breakup point.

Entegris

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Entegris are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Entegris is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Delek Drilling and Entegris

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

The idea behind Delek Drilling and Entegris 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..