Correlation Between Stampede Drilling and Arbor Metals
Can any of the company-specific risk be diversified away by investing in both Stampede Drilling and Arbor Metals 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 Stampede Drilling and Arbor Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stampede Drilling and Arbor Metals Corp, you can compare the effects of market volatilities on Stampede Drilling and Arbor Metals 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 Stampede Drilling with a short position of Arbor Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stampede Drilling and Arbor Metals.
Diversification Opportunities for Stampede Drilling and Arbor Metals
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stampede and Arbor is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Stampede Drilling and Arbor Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbor Metals Corp and Stampede 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 Stampede Drilling are associated (or correlated) with Arbor Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbor Metals Corp has no effect on the direction of Stampede Drilling i.e., Stampede Drilling and Arbor Metals go up and down completely randomly.
Pair Corralation between Stampede Drilling and Arbor Metals
Assuming the 90 days horizon Stampede Drilling is expected to generate 1.24 times more return on investment than Arbor Metals. However, Stampede Drilling is 1.24 times more volatile than Arbor Metals Corp. It trades about 0.0 of its potential returns per unit of risk. Arbor Metals Corp is currently generating about -0.16 per unit of risk. If you would invest 20.00 in Stampede Drilling on September 12, 2024 and sell it today you would lose (1.00) from holding Stampede Drilling or give up 5.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stampede Drilling vs. Arbor Metals Corp
Performance |
| Timeline |
| Stampede Drilling |
| Arbor Metals Corp |
Stampede Drilling and Arbor Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stampede Drilling and Arbor Metals
The main advantage of trading using opposite Stampede Drilling and Arbor Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stampede Drilling position performs unexpectedly, Arbor Metals 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 Arbor Metals will offset losses from the drop in Arbor Metals' long position.| Stampede Drilling vs. Trican Well Service | Stampede Drilling vs. Ensign Energy Services | Stampede Drilling vs. Calfrac Well Services | Stampede Drilling vs. Birchcliff Energy |
| Arbor Metals vs. Foraco International SA | Arbor Metals vs. Geodrill Limited | Arbor Metals vs. Major Drilling Group | Arbor Metals vs. Bri Chem Corp |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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