Correlation Between Stampede Drilling and Oceanic Iron
Can any of the company-specific risk be diversified away by investing in both Stampede Drilling and Oceanic Iron 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 Oceanic Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stampede Drilling and Oceanic Iron Ore, you can compare the effects of market volatilities on Stampede Drilling and Oceanic Iron 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 Oceanic Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stampede Drilling and Oceanic Iron.
Diversification Opportunities for Stampede Drilling and Oceanic Iron
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Stampede and Oceanic is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Stampede Drilling and Oceanic Iron Ore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oceanic Iron Ore 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 Oceanic Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oceanic Iron Ore has no effect on the direction of Stampede Drilling i.e., Stampede Drilling and Oceanic Iron go up and down completely randomly.
Pair Corralation between Stampede Drilling and Oceanic Iron
Assuming the 90 days horizon Stampede Drilling is expected to generate 57.51 times less return on investment than Oceanic Iron. But when comparing it to its historical volatility, Stampede Drilling is 5.73 times less risky than Oceanic Iron. It trades about 0.01 of its potential returns per unit of risk. Oceanic Iron Ore is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Oceanic Iron Ore on October 13, 2024 and sell it today you would earn a total of 6.00 from holding Oceanic Iron Ore or generate 30.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stampede Drilling vs. Oceanic Iron Ore
Performance |
| Timeline |
| Stampede Drilling |
| Oceanic Iron Ore |
Stampede Drilling and Oceanic Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stampede Drilling and Oceanic Iron
The main advantage of trading using opposite Stampede Drilling and Oceanic Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stampede Drilling position performs unexpectedly, Oceanic Iron 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 Oceanic Iron will offset losses from the drop in Oceanic Iron's long position.| Stampede Drilling vs. STEP Energy Services | Stampede Drilling vs. Southern Energy Corp | Stampede Drilling vs. PHX Energy Services |
| Oceanic Iron vs. Reliq Health Technologies | Oceanic Iron vs. Leons Furniture Limited | Oceanic Iron vs. AGF Management Limited | Oceanic Iron vs. Brookfield Office Properties |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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