Correlation Between Stampede Drilling and PayPal Holdings
Can any of the company-specific risk be diversified away by investing in both Stampede Drilling and PayPal Holdings 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 PayPal Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stampede Drilling and PayPal Holdings CDR, you can compare the effects of market volatilities on Stampede Drilling and PayPal Holdings 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 PayPal Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stampede Drilling and PayPal Holdings.
Diversification Opportunities for Stampede Drilling and PayPal Holdings
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Stampede and PayPal is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Stampede Drilling and PayPal Holdings CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PayPal Holdings CDR 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 PayPal Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PayPal Holdings CDR has no effect on the direction of Stampede Drilling i.e., Stampede Drilling and PayPal Holdings go up and down completely randomly.
Pair Corralation between Stampede Drilling and PayPal Holdings
Assuming the 90 days horizon Stampede Drilling is expected to under-perform the PayPal Holdings. In addition to that, Stampede Drilling is 1.86 times more volatile than PayPal Holdings CDR. It trades about -0.12 of its total potential returns per unit of risk. PayPal Holdings CDR is currently generating about 0.2 per unit of volatility. If you would invest 597.00 in PayPal Holdings CDR on August 30, 2024 and sell it today you would earn a total of 47.00 from holding PayPal Holdings CDR or generate 7.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stampede Drilling vs. PayPal Holdings CDR
Performance |
| Timeline |
| Stampede Drilling |
| PayPal Holdings CDR |
Stampede Drilling and PayPal Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stampede Drilling and PayPal Holdings
The main advantage of trading using opposite Stampede Drilling and PayPal Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stampede Drilling position performs unexpectedly, PayPal Holdings 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 PayPal Holdings will offset losses from the drop in PayPal Holdings' long position.| Stampede Drilling vs. STEP Energy Services | Stampede Drilling vs. Southern Energy Corp | Stampede Drilling vs. PHX Energy Services |
| PayPal Holdings vs. Apple Inc CDR | PayPal Holdings vs. NVIDIA CDR | PayPal Holdings vs. Microsoft Corp CDR | PayPal Holdings vs. Amazon CDR |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |