Correlation Between Stampede Drilling and Foran Mining
Can any of the company-specific risk be diversified away by investing in both Stampede Drilling and Foran Mining 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 Foran Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stampede Drilling and Foran Mining, you can compare the effects of market volatilities on Stampede Drilling and Foran Mining 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 Foran Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stampede Drilling and Foran Mining.
Diversification Opportunities for Stampede Drilling and Foran Mining
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Stampede and Foran is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Stampede Drilling and Foran Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foran Mining 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 Foran Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foran Mining has no effect on the direction of Stampede Drilling i.e., Stampede Drilling and Foran Mining go up and down completely randomly.
Pair Corralation between Stampede Drilling and Foran Mining
Assuming the 90 days horizon Stampede Drilling is expected to under-perform the Foran Mining. In addition to that, Stampede Drilling is 1.38 times more volatile than Foran Mining. It trades about -0.01 of its total potential returns per unit of risk. Foran Mining is currently generating about 0.03 per unit of volatility. If you would invest 312.00 in Foran Mining on November 1, 2024 and sell it today you would earn a total of 72.00 from holding Foran Mining or generate 23.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Stampede Drilling vs. Foran Mining
Performance |
| Timeline |
| Stampede Drilling |
| Foran Mining |
Stampede Drilling and Foran Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stampede Drilling and Foran Mining
The main advantage of trading using opposite Stampede Drilling and Foran Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stampede Drilling position performs unexpectedly, Foran Mining 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 Foran Mining will offset losses from the drop in Foran Mining's long position.| Stampede Drilling vs. STEP Energy Services | Stampede Drilling vs. Southern Energy Corp | Stampede Drilling vs. PHX Energy Services |
| Foran Mining vs. Micron Technology, | Foran Mining vs. Birchtech Corp | Foran Mining vs. Evertz Technologies Limited | Foran Mining vs. Blackrock Silver Corp |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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