Correlation Between E Split and Stampede Drilling
Can any of the company-specific risk be diversified away by investing in both E Split 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 E Split and Stampede Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between E Split Corp and Stampede Drilling, you can compare the effects of market volatilities on E Split 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 E Split with a short position of Stampede Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of E Split and Stampede Drilling.
Diversification Opportunities for E Split and Stampede Drilling
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ENS-PA and Stampede is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding E Split Corp and Stampede Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stampede Drilling and E Split 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 E Split Corp 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 E Split i.e., E Split and Stampede Drilling go up and down completely randomly.
Pair Corralation between E Split and Stampede Drilling
Assuming the 90 days trading horizon E Split Corp is expected to generate 0.14 times more return on investment than Stampede Drilling. However, E Split Corp is 7.39 times less risky than Stampede Drilling. It trades about 0.11 of its potential returns per unit of risk. Stampede Drilling is currently generating about -0.01 per unit of risk. If you would invest 879.00 in E Split Corp on August 30, 2024 and sell it today you would earn a total of 236.00 from holding E Split Corp or generate 26.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
E Split Corp vs. Stampede Drilling
Performance |
| Timeline |
| E Split Corp |
| Stampede Drilling |
E Split and Stampede Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E Split and Stampede Drilling
The main advantage of trading using opposite E Split and Stampede Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E Split 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.The idea behind E Split Corp and Stampede 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.| Stampede Drilling vs. Canadian Natural Resources | Stampede Drilling vs. Suncor Energy | Stampede Drilling vs. iShares Canadian HYBrid | Stampede Drilling vs. Altagas Cum Red |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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