Correlation Between Stampede Drilling and Pembina Pipeline
Can any of the company-specific risk be diversified away by investing in both Stampede Drilling and Pembina Pipeline 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 Pembina Pipeline into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stampede Drilling and Pembina Pipeline Corp, you can compare the effects of market volatilities on Stampede Drilling and Pembina Pipeline 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 Pembina Pipeline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stampede Drilling and Pembina Pipeline.
Diversification Opportunities for Stampede Drilling and Pembina Pipeline
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Stampede and Pembina is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Stampede Drilling and Pembina Pipeline Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pembina Pipeline Corp 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 Pembina Pipeline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pembina Pipeline Corp has no effect on the direction of Stampede Drilling i.e., Stampede Drilling and Pembina Pipeline go up and down completely randomly.
Pair Corralation between Stampede Drilling and Pembina Pipeline
Assuming the 90 days horizon Stampede Drilling is expected to under-perform the Pembina Pipeline. In addition to that, Stampede Drilling is 2.82 times more volatile than Pembina Pipeline Corp. It trades about -0.12 of its total potential returns per unit of risk. Pembina Pipeline Corp is currently generating about -0.03 per unit of volatility. If you would invest 5,825 in Pembina Pipeline Corp on August 30, 2024 and sell it today you would lose (54.00) from holding Pembina Pipeline Corp or give up 0.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stampede Drilling vs. Pembina Pipeline Corp
Performance |
| Timeline |
| Stampede Drilling |
| Pembina Pipeline Corp |
Stampede Drilling and Pembina Pipeline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stampede Drilling and Pembina Pipeline
The main advantage of trading using opposite Stampede Drilling and Pembina Pipeline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stampede Drilling position performs unexpectedly, Pembina Pipeline 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 Pembina Pipeline will offset losses from the drop in Pembina Pipeline's long position.| Stampede Drilling vs. STEP Energy Services | Stampede Drilling vs. Southern Energy Corp | Stampede Drilling vs. PHX Energy Services |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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