Correlation Between Delek Drilling and Jyske Bank

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

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

Diversification Opportunities for Delek Drilling and Jyske Bank

0.24

Correlation Coefficient

Delek Drilling  Jyske Bank

Modest diversification

The 3 months correlation between Delek and Jyske is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Delek Drilling and Jyske Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jyske Bank AS 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 Jyske Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jyske Bank AS has no effect on the direction of Delek Drilling i.e., Delek Drilling and Jyske Bank go up and down completely randomly.

Pair Corralation between Delek Drilling and Jyske Bank

Assuming the 90 days horizon Delek Drilling is expected to generate 1.89 times more return on investment than Jyske Bank. However, Delek Drilling is 1.89 times more volatile than Jyske Bank AS. It trades about 0.09 of its potential returns per unit of risk. Jyske Bank AS is currently generating about 0.01 per unit of risk. If you would invest  246.00  in Delek Drilling on February 1, 2025 and sell it today you would earn a total of  89.00  from holding Delek Drilling or generate 36.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	56.91%
Values	Daily Returns

Delek Drilling   vs.  Jyske Bank AS

Delek Drilling

Risk-Adjusted Performance

Very Weak

Over the last 90 days Delek Drilling has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Delek Drilling is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Jyske Bank AS

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jyske Bank AS are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Jyske Bank may actually be approaching a critical reversion point that can send shares even higher in June 2025.

Pair Trading with Delek Drilling and Jyske Bank

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

The idea behind Delek Drilling and Jyske Bank AS 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.