Correlation Between Stampede Drilling and Brookfield Investments
Can any of the company-specific risk be diversified away by investing in both Stampede Drilling and Brookfield Investments 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 Investments 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 Investments, you can compare the effects of market volatilities on Stampede Drilling and Brookfield Investments 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 Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stampede Drilling and Brookfield Investments.
Diversification Opportunities for Stampede Drilling and Brookfield Investments
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Stampede and Brookfield is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Stampede Drilling and Brookfield Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Investments 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 Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Investments has no effect on the direction of Stampede Drilling i.e., Stampede Drilling and Brookfield Investments go up and down completely randomly.
Pair Corralation between Stampede Drilling and Brookfield Investments
Assuming the 90 days horizon Stampede Drilling is expected to under-perform the Brookfield Investments. In addition to that, Stampede Drilling is 5.85 times more volatile than Brookfield Investments. It trades about -0.12 of its total potential returns per unit of risk. Brookfield Investments is currently generating about -0.09 per unit of volatility. If you would invest 2,530 in Brookfield Investments on August 30, 2024 and sell it today you would lose (17.00) from holding Brookfield Investments or give up 0.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 59.09% |
| Values | Daily Returns |
Stampede Drilling vs. Brookfield Investments
Performance |
| Timeline |
| Stampede Drilling |
| Brookfield Investments |
Stampede Drilling and Brookfield Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stampede Drilling and Brookfield Investments
The main advantage of trading using opposite Stampede Drilling and Brookfield Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stampede Drilling position performs unexpectedly, Brookfield Investments 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 Investments will offset losses from the drop in Brookfield Investments' long position.| Stampede Drilling vs. Canadian Natural Resources | Stampede Drilling vs. Suncor Energy | Stampede Drilling vs. iShares Canadian HYBrid | Stampede Drilling vs. Altagas Cum Red |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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