Correlation Between Stampede Drilling and Brookfield Infrastructure
Can any of the company-specific risk be diversified away by investing in both Stampede Drilling and Brookfield Infrastructure 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 Brookfield Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stampede Drilling and Brookfield Infrastructure Partners, you can compare the effects of market volatilities on Stampede Drilling and Brookfield Infrastructure 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 Brookfield Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stampede Drilling and Brookfield Infrastructure.
Diversification Opportunities for Stampede Drilling and Brookfield Infrastructure
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Stampede and Brookfield is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Stampede Drilling and Brookfield Infrastructure Part in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Infrastructure 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 Brookfield Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Infrastructure has no effect on the direction of Stampede Drilling i.e., Stampede Drilling and Brookfield Infrastructure go up and down completely randomly.
Pair Corralation between Stampede Drilling and Brookfield Infrastructure
Assuming the 90 days horizon Stampede Drilling is expected to under-perform the Brookfield Infrastructure. In addition to that, Stampede Drilling is 4.19 times more volatile than Brookfield Infrastructure Partners. It trades about -0.01 of its total potential returns per unit of risk. Brookfield Infrastructure Partners is currently generating about 0.17 per unit of volatility. If you would invest 1,653 in Brookfield Infrastructure Partners on September 4, 2024 and sell it today you would earn a total of 672.00 from holding Brookfield Infrastructure Partners or generate 40.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stampede Drilling vs. Brookfield Infrastructure Part
Performance |
| Timeline |
| Stampede Drilling |
| Brookfield Infrastructure |
Stampede Drilling and Brookfield Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stampede Drilling and Brookfield Infrastructure
The main advantage of trading using opposite Stampede Drilling and Brookfield Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stampede Drilling position performs unexpectedly, Brookfield Infrastructure 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 Brookfield Infrastructure will offset losses from the drop in Brookfield Infrastructure's long position.| Stampede Drilling vs. STEP Energy Services | Stampede Drilling vs. Southern Energy Corp | Stampede Drilling vs. PHX Energy Services | Stampede Drilling vs. iShares Canadian HYBrid |
| Brookfield Infrastructure vs. Berkshire Hathaway CDR | Brookfield Infrastructure vs. Microsoft Corp CDR | Brookfield Infrastructure vs. Apple Inc CDR | Brookfield Infrastructure vs. Alphabet Inc CDR |
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.
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