Correlation Between Pine Cliff and Stamper Oil
Can any of the company-specific risk be diversified away by investing in both Pine Cliff and Stamper Oil 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 Pine Cliff and Stamper Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pine Cliff Energy and Stamper Oil Gas, you can compare the effects of market volatilities on Pine Cliff and Stamper Oil 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 Pine Cliff with a short position of Stamper Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pine Cliff and Stamper Oil.
Diversification Opportunities for Pine Cliff and Stamper Oil
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pine and Stamper is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Pine Cliff Energy and Stamper Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stamper Oil Gas and Pine Cliff 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 Pine Cliff Energy are associated (or correlated) with Stamper Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stamper Oil Gas has no effect on the direction of Pine Cliff i.e., Pine Cliff and Stamper Oil go up and down completely randomly.
Pair Corralation between Pine Cliff and Stamper Oil
Assuming the 90 days trading horizon Pine Cliff is expected to generate 25.02 times less return on investment than Stamper Oil. But when comparing it to its historical volatility, Pine Cliff Energy is 13.27 times less risky than Stamper Oil. It trades about 0.07 of its potential returns per unit of risk. Stamper Oil Gas is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Stamper Oil Gas on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Stamper Oil Gas or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Pine Cliff Energy vs. Stamper Oil Gas
Performance |
| Timeline |
| Pine Cliff Energy |
| Stamper Oil Gas |
Pine Cliff and Stamper Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pine Cliff and Stamper Oil
The main advantage of trading using opposite Pine Cliff and Stamper Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pine Cliff position performs unexpectedly, Stamper Oil 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 Stamper Oil will offset losses from the drop in Stamper Oil's long position.| Pine Cliff vs. Gear Energy | Pine Cliff vs. Headwater Exploration | Pine Cliff vs. Cardinal Energy | Pine Cliff vs. Journey 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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