Correlation Between ISign Media and Stampede Drilling
Can any of the company-specific risk be diversified away by investing in both ISign Media 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 ISign Media and Stampede Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iSign Media Solutions and Stampede Drilling, you can compare the effects of market volatilities on ISign Media 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 ISign Media with a short position of Stampede Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of ISign Media and Stampede Drilling.
Diversification Opportunities for ISign Media and Stampede Drilling
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ISign and Stampede is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding iSign Media Solutions and Stampede Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stampede Drilling and ISign Media 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 iSign Media Solutions 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 ISign Media i.e., ISign Media and Stampede Drilling go up and down completely randomly.
Pair Corralation between ISign Media and Stampede Drilling
Assuming the 90 days horizon iSign Media Solutions is expected to generate 0.31 times more return on investment than Stampede Drilling. However, iSign Media Solutions is 3.24 times less risky than Stampede Drilling. It trades about -0.04 of its potential returns per unit of risk. Stampede Drilling is currently generating about -0.12 per unit of risk. If you would invest 1,400 in iSign Media Solutions on August 31, 2024 and sell it today you would lose (14.00) from holding iSign Media Solutions or give up 1.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iSign Media Solutions vs. Stampede Drilling
Performance |
| Timeline |
| iSign Media Solutions |
| Stampede Drilling |
ISign Media and Stampede Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ISign Media and Stampede Drilling
The main advantage of trading using opposite ISign Media and Stampede Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ISign Media 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.| ISign Media vs. Mene Inc | ISign Media vs. Africa Oil Corp | ISign Media vs. Financial 15 Split | ISign Media vs. Rubicon Organics |
| Stampede Drilling vs. Forum Energy Metals | Stampede Drilling vs. iShares Canadian HYBrid | Stampede Drilling vs. Brompton European Dividend | Stampede Drilling vs. Solar Alliance Energy |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |