Correlation Between Stampede Drilling and Nicola Mining
Can any of the company-specific risk be diversified away by investing in both Stampede Drilling and Nicola 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 Nicola 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 Nicola Mining, you can compare the effects of market volatilities on Stampede Drilling and Nicola 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 Nicola Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stampede Drilling and Nicola Mining.
Diversification Opportunities for Stampede Drilling and Nicola Mining
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Stampede and Nicola is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Stampede Drilling and Nicola Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nicola 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 Nicola Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nicola Mining has no effect on the direction of Stampede Drilling i.e., Stampede Drilling and Nicola Mining go up and down completely randomly.
Pair Corralation between Stampede Drilling and Nicola Mining
Assuming the 90 days horizon Stampede Drilling is expected to under-perform the Nicola Mining. But the stock apears to be less risky and, when comparing its historical volatility, Stampede Drilling is 1.35 times less risky than Nicola Mining. The stock trades about -0.01 of its potential returns per unit of risk. The Nicola Mining is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 26.00 in Nicola Mining on September 14, 2024 and sell it today you would earn a total of 2.00 from holding Nicola Mining or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Stampede Drilling vs. Nicola Mining
Performance |
| Timeline |
| Stampede Drilling |
| Nicola Mining |
Stampede Drilling and Nicola Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stampede Drilling and Nicola Mining
The main advantage of trading using opposite Stampede Drilling and Nicola Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stampede Drilling position performs unexpectedly, Nicola 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 Nicola Mining will offset losses from the drop in Nicola Mining's long position.| Stampede Drilling vs. STEP Energy Services | Stampede Drilling vs. Southern Energy Corp | Stampede Drilling vs. PHX Energy Services |
| Nicola Mining vs. Foraco International SA | Nicola Mining vs. Geodrill Limited | Nicola Mining vs. Major Drilling Group | Nicola Mining vs. Bri Chem 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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