Correlation Between Southern Energy and Stampede Drilling
Can any of the company-specific risk be diversified away by investing in both Southern Energy and Stampede Drilling 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 Southern Energy and Stampede Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Energy Corp and Stampede Drilling, you can compare the effects of market volatilities on Southern Energy and Stampede Drilling 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 Southern Energy with a short position of Stampede Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Energy and Stampede Drilling.
Diversification Opportunities for Southern Energy and Stampede Drilling
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Southern and Stampede is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Southern Energy Corp and Stampede Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stampede Drilling and Southern Energy 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 Southern Energy Corp are associated (or correlated) with Stampede Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stampede Drilling has no effect on the direction of Southern Energy i.e., Southern Energy and Stampede Drilling go up and down completely randomly.
Pair Corralation between Southern Energy and Stampede Drilling
Assuming the 90 days horizon Southern Energy Corp is expected to under-perform the Stampede Drilling. In addition to that, Southern Energy is 1.88 times more volatile than Stampede Drilling. It trades about -0.19 of its total potential returns per unit of risk. Stampede Drilling is currently generating about -0.13 per unit of volatility. If you would invest 22.00 in Stampede Drilling on August 26, 2024 and sell it today you would lose (2.00) from holding Stampede Drilling or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern Energy Corp vs. Stampede Drilling
Performance |
| Timeline |
| Southern Energy Corp |
| Stampede Drilling |
Southern Energy and Stampede Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Energy and Stampede Drilling
The main advantage of trading using opposite Southern Energy and Stampede Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Energy position performs unexpectedly, Stampede Drilling 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 Stampede Drilling will offset losses from the drop in Stampede Drilling's long position.| Southern Energy vs. InPlay Oil Corp | Southern Energy vs. Yangarra Resources | Southern Energy vs. iShares Canadian HYBrid | Southern Energy vs. Altagas Cum Red |
| Stampede Drilling vs. STEP Energy Services | Stampede Drilling vs. Southern Energy Corp | Stampede Drilling vs. PHX Energy Services |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |