Correlation Between Delek Drilling and Fidelity Advisor

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

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

Diversification Opportunities for Delek Drilling and Fidelity Advisor

0.88

Correlation Coefficient

Delek Drilling  Fidelity Advisor

Very poor diversification

The 3 months correlation between Delek and Fidelity is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Delek Drilling and Fidelity Advisor Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Div 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 Fidelity Advisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor Div has no effect on the direction of Delek Drilling i.e., Delek Drilling and Fidelity Advisor go up and down completely randomly.

Pair Corralation between Delek Drilling and Fidelity Advisor

Assuming the 90 days horizon Delek Drilling is expected to generate 3.67 times more return on investment than Fidelity Advisor. However, Delek Drilling is 3.67 times more volatile than Fidelity Advisor Diversified. It trades about 0.19 of its potential returns per unit of risk. Fidelity Advisor Diversified is currently generating about 0.08 per unit of risk. If you would invest  335.00  in Delek Drilling on May 6, 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 Together
Strength	Strong
Accuracy	96.88%
Values	Daily Returns

Delek Drilling   vs.  Fidelity Advisor Diversified

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.

Fidelity Advisor Div

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Diversified are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Fidelity Advisor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Delek Drilling and Fidelity Advisor

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

The idea behind Delek Drilling and Fidelity Advisor Diversified 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.