Correlation Between Teleflex Incorporated and Delek Drilling

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

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

Diversification Opportunities for Teleflex Incorporated and Delek Drilling

0.23

Correlation Coefficient

Teleflex Incorporated  Delek Drilling

Modest diversification

The 3 months correlation between Teleflex and Delek is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Teleflex Incorporated and Delek Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Drilling and Teleflex Incorporated 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 Teleflex Incorporated 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 Teleflex Incorporated i.e., Teleflex Incorporated and Delek Drilling go up and down completely randomly.

Pair Corralation between Teleflex Incorporated and Delek Drilling

Considering the 90-day investment horizon Teleflex Incorporated is expected to under-perform the Delek Drilling. But the stock apears to be less risky and, when comparing its historical volatility, Teleflex Incorporated is 1.29 times less risky than Delek Drilling. The stock trades about -0.07 of its potential returns per unit of risk. The Delek Drilling is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  253.00  in Delek Drilling on February 28, 2024 and sell it today you would earn a total of  12.00  from holding Delek Drilling or generate 4.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Teleflex Incorporated  vs.  Delek Drilling

Teleflex Incorporated

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Teleflex Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Delek Drilling

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Delek Drilling are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with Teleflex Incorporated and Delek Drilling

The main advantage of trading using opposite Teleflex Incorporated and Delek Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teleflex Incorporated 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 Teleflex Incorporated 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.