Correlation Between Stampede Drilling and Maple Leaf
Can any of the company-specific risk be diversified away by investing in both Stampede Drilling and Maple Leaf 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 Maple Leaf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stampede Drilling and Maple Leaf Foods, you can compare the effects of market volatilities on Stampede Drilling and Maple Leaf 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 Maple Leaf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stampede Drilling and Maple Leaf.
Diversification Opportunities for Stampede Drilling and Maple Leaf
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Stampede and Maple is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Stampede Drilling and Maple Leaf Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maple Leaf Foods 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 Maple Leaf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maple Leaf Foods has no effect on the direction of Stampede Drilling i.e., Stampede Drilling and Maple Leaf go up and down completely randomly.
Pair Corralation between Stampede Drilling and Maple Leaf
Assuming the 90 days horizon Stampede Drilling is expected to under-perform the Maple Leaf. In addition to that, Stampede Drilling is 2.06 times more volatile than Maple Leaf Foods. It trades about -0.01 of its total potential returns per unit of risk. Maple Leaf Foods is currently generating about -0.02 per unit of volatility. If you would invest 2,446 in Maple Leaf Foods on September 14, 2024 and sell it today you would lose (258.00) from holding Maple Leaf Foods or give up 10.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Stampede Drilling vs. Maple Leaf Foods
Performance |
| Timeline |
| Stampede Drilling |
| Maple Leaf Foods |
Stampede Drilling and Maple Leaf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stampede Drilling and Maple Leaf
The main advantage of trading using opposite Stampede Drilling and Maple Leaf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stampede Drilling position performs unexpectedly, Maple Leaf 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 Maple Leaf will offset losses from the drop in Maple Leaf's long position.| Stampede Drilling vs. STEP Energy Services | Stampede Drilling vs. Southern Energy Corp | Stampede Drilling vs. PHX Energy Services |
| Maple Leaf vs. Leons Furniture Limited | Maple Leaf vs. Autocanada | Maple Leaf vs. Exco Technologies Limited |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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