Correlation Between Stampede Drilling and Enthusiast Gaming
Can any of the company-specific risk be diversified away by investing in both Stampede Drilling and Enthusiast Gaming 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 Enthusiast Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stampede Drilling and Enthusiast Gaming Holdings, you can compare the effects of market volatilities on Stampede Drilling and Enthusiast Gaming 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 Enthusiast Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stampede Drilling and Enthusiast Gaming.
Diversification Opportunities for Stampede Drilling and Enthusiast Gaming
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stampede and Enthusiast is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Stampede Drilling and Enthusiast Gaming Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enthusiast Gaming 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 Enthusiast Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enthusiast Gaming has no effect on the direction of Stampede Drilling i.e., Stampede Drilling and Enthusiast Gaming go up and down completely randomly.
Pair Corralation between Stampede Drilling and Enthusiast Gaming
Assuming the 90 days horizon Stampede Drilling is expected to generate 0.59 times more return on investment than Enthusiast Gaming. However, Stampede Drilling is 1.69 times less risky than Enthusiast Gaming. It trades about -0.01 of its potential returns per unit of risk. Enthusiast Gaming Holdings is currently generating about -0.04 per unit of risk. If you would invest 28.00 in Stampede Drilling on November 27, 2024 and sell it today you would lose (11.00) from holding Stampede Drilling or give up 39.29% 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. Enthusiast Gaming Holdings
Performance |
| Timeline |
| Stampede Drilling |
| Enthusiast Gaming |
Stampede Drilling and Enthusiast Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stampede Drilling and Enthusiast Gaming
The main advantage of trading using opposite Stampede Drilling and Enthusiast Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stampede Drilling position performs unexpectedly, Enthusiast Gaming 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 Enthusiast Gaming will offset losses from the drop in Enthusiast Gaming's long position.| Stampede Drilling vs. STEP Energy Services | Stampede Drilling vs. Southern Energy Corp | Stampede Drilling vs. PHX Energy Services |
| Enthusiast Gaming vs. Bragg Gaming Group | Enthusiast Gaming vs. ESE Entertainment | Enthusiast Gaming vs. Converge Technology Solutions | Enthusiast Gaming vs. Docebo Inc |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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