Correlation Between Precision Drilling and Stagwell
Can any of the company-specific risk be diversified away by investing in both Precision Drilling and Stagwell 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 Precision Drilling and Stagwell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Precision Drilling and Stagwell, you can compare the effects of market volatilities on Precision Drilling and Stagwell 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 Precision Drilling with a short position of Stagwell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Precision Drilling and Stagwell.
Diversification Opportunities for Precision Drilling and Stagwell
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Precision and Stagwell is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Precision Drilling and Stagwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stagwell and Precision 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 Precision Drilling are associated (or correlated) with Stagwell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stagwell has no effect on the direction of Precision Drilling i.e., Precision Drilling and Stagwell go up and down completely randomly.
Pair Corralation between Precision Drilling and Stagwell
Considering the 90-day investment horizon Precision Drilling is expected to under-perform the Stagwell. But the stock apears to be less risky and, when comparing its historical volatility, Precision Drilling is 1.03 times less risky than Stagwell. The stock trades about -0.05 of its potential returns per unit of risk. The Stagwell is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 694.00 in Stagwell on August 31, 2024 and sell it today you would earn a total of 97.00 from holding Stagwell or generate 13.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Precision Drilling vs. Stagwell
Performance |
| Timeline |
| Precision Drilling |
| Stagwell |
Precision Drilling and Stagwell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Precision Drilling and Stagwell
The main advantage of trading using opposite Precision Drilling and Stagwell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Precision Drilling position performs unexpectedly, Stagwell 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 Stagwell will offset losses from the drop in Stagwell's long position.| Precision Drilling vs. Nabors Industries | Precision Drilling vs. Borr Drilling | Precision Drilling vs. Patterson UTI Energy | Precision Drilling vs. Noble plc |
| Stagwell vs. Innovid Corp | Stagwell vs. Interpublic Group of | Stagwell vs. Cimpress NV | Stagwell vs. Criteo Sa |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |