Correlation Between Stampede Drilling and British Amer
Can any of the company-specific risk be diversified away by investing in both Stampede Drilling and British Amer 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 British Amer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stampede Drilling and biOasis Technologies, you can compare the effects of market volatilities on Stampede Drilling and British Amer 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 British Amer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stampede Drilling and British Amer.
Diversification Opportunities for Stampede Drilling and British Amer
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Stampede and British is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Stampede Drilling and biOasis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on biOasis Technologies 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 British Amer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of biOasis Technologies has no effect on the direction of Stampede Drilling i.e., Stampede Drilling and British Amer go up and down completely randomly.
Pair Corralation between Stampede Drilling and British Amer
Assuming the 90 days horizon Stampede Drilling is expected to under-perform the British Amer. But the stock apears to be less risky and, when comparing its historical volatility, Stampede Drilling is 91.89 times less risky than British Amer. The stock trades about -0.06 of its potential returns per unit of risk. The biOasis Technologies is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 127.00 in biOasis Technologies on August 30, 2024 and sell it today you would lose (126.50) from holding biOasis Technologies or give up 99.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stampede Drilling vs. biOasis Technologies
Performance |
| Timeline |
| Stampede Drilling |
| biOasis Technologies |
Stampede Drilling and British Amer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stampede Drilling and British Amer
The main advantage of trading using opposite Stampede Drilling and British Amer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stampede Drilling position performs unexpectedly, British Amer 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 British Amer will offset losses from the drop in British Amer's long position.| Stampede Drilling vs. STEP Energy Services | Stampede Drilling vs. Southern Energy Corp | Stampede Drilling vs. PHX Energy Services |
| British Amer vs. AKITA Drilling | British Amer vs. 2028 Investment Grade | British Amer vs. Stampede Drilling | British Amer vs. CNJ Capital Investments |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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