Correlation Between Calfrac Well and Stampede Drilling
Can any of the company-specific risk be diversified away by investing in both Calfrac Well and Stampede 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 Calfrac Well and Stampede Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calfrac Well Services and Stampede Drilling, you can compare the effects of market volatilities on Calfrac Well and Stampede 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 Calfrac Well with a short position of Stampede Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calfrac Well and Stampede Drilling.
Diversification Opportunities for Calfrac Well and Stampede Drilling
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Calfrac and Stampede is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Calfrac Well Services and Stampede Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stampede Drilling and Calfrac Well 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 Calfrac Well Services are associated (or correlated) with Stampede Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stampede Drilling has no effect on the direction of Calfrac Well i.e., Calfrac Well and Stampede Drilling go up and down completely randomly.
Pair Corralation between Calfrac Well and Stampede Drilling
Assuming the 90 days trading horizon Calfrac Well Services is expected to generate 0.38 times more return on investment than Stampede Drilling. However, Calfrac Well Services is 2.62 times less risky than Stampede Drilling. It trades about 0.16 of its potential returns per unit of risk. Stampede Drilling is currently generating about -0.06 per unit of risk. If you would invest 381.00 in Calfrac Well Services on September 14, 2024 and sell it today you would earn a total of 16.00 from holding Calfrac Well Services or generate 4.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calfrac Well Services vs. Stampede Drilling
Performance |
| Timeline |
| Calfrac Well Services |
| Stampede Drilling |
Calfrac Well and Stampede Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calfrac Well and Stampede Drilling
The main advantage of trading using opposite Calfrac Well and Stampede Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calfrac Well position performs unexpectedly, Stampede 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 Stampede Drilling will offset losses from the drop in Stampede Drilling's long position.| Calfrac Well vs. Trican Well Service | Calfrac Well vs. Ensign Energy Services | Calfrac Well vs. Precision Drilling | Calfrac Well vs. Secure Energy Services |
| Stampede Drilling vs. STEP Energy Services | Stampede Drilling vs. Southern Energy Corp | Stampede Drilling vs. PHX Energy Services |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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