Correlation Between Delek Drilling and Clearwater Analytics

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

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

Diversification Opportunities for Delek Drilling and Clearwater Analytics

-0.58

Correlation Coefficient

Delek Drilling  Clearwater Analytics

Excellent diversification

The 3 months correlation between Delek and Clearwater is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Delek Drilling and Clearwater Analytics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearwater Analytics 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 Clearwater Analytics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearwater Analytics has no effect on the direction of Delek Drilling i.e., Delek Drilling and Clearwater Analytics go up and down completely randomly.

Pair Corralation between Delek Drilling and Clearwater Analytics

Assuming the 90 days horizon Delek Drilling is expected to generate 1.41 times more return on investment than Clearwater Analytics. However, Delek Drilling is 1.41 times more volatile than Clearwater Analytics Holdings. It trades about 0.19 of its potential returns per unit of risk. Clearwater Analytics Holdings is currently generating about -0.08 per unit of risk. If you would invest  335.00  in Delek Drilling on May 7, 2025 and sell it today you would earn a total of  116.00  from holding Delek Drilling or generate 34.63% return on investment over 90 days.

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

Delek Drilling   vs.  Clearwater Analytics Holdings

Delek Drilling

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Delek Drilling are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Delek Drilling reported solid returns over the last few months and may actually be approaching a breakup point.

Clearwater Analytics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clearwater Analytics Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Delek Drilling and Clearwater Analytics

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

The idea behind Delek Drilling and Clearwater Analytics Holdings 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.