Correlation Between Suncor Energy and Stampede Drilling
Can any of the company-specific risk be diversified away by investing in both Suncor 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 Suncor 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 Suncor Energy and Stampede Drilling, you can compare the effects of market volatilities on Suncor 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 Suncor Energy with a short position of Stampede Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suncor Energy and Stampede Drilling.
Diversification Opportunities for Suncor Energy and Stampede Drilling
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Suncor and Stampede is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Suncor Energy and Stampede Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stampede Drilling and Suncor 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 Suncor Energy 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 Suncor Energy i.e., Suncor Energy and Stampede Drilling go up and down completely randomly.
Pair Corralation between Suncor Energy and Stampede Drilling
Assuming the 90 days horizon Suncor Energy is expected to generate 0.46 times more return on investment than Stampede Drilling. However, Suncor Energy is 2.16 times less risky than Stampede Drilling. It trades about 0.06 of its potential returns per unit of risk. Stampede Drilling is currently generating about -0.02 per unit of risk. If you would invest 4,454 in Suncor Energy on September 1, 2024 and sell it today you would earn a total of 1,117 from holding Suncor Energy or generate 25.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suncor Energy vs. Stampede Drilling
Performance |
| Timeline |
| Suncor Energy |
| Stampede Drilling |
Suncor Energy and Stampede Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suncor Energy and Stampede Drilling
The main advantage of trading using opposite Suncor Energy and Stampede Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suncor 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.| Suncor Energy vs. Enbridge | Suncor Energy vs. Canadian Natural Resources | Suncor Energy vs. Toronto Dominion Bank | Suncor Energy vs. Bank of Nova |
| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |