Correlation Between Precision Drilling and BeMetals Corp

Can any of the company-specific risk be diversified away by investing in both Precision Drilling and BeMetals Corp 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 Precision Drilling and BeMetals Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Precision Drilling and BeMetals Corp, you can compare the effects of market volatilities on Precision Drilling and BeMetals Corp 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 Precision Drilling with a short position of BeMetals Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Precision Drilling and BeMetals Corp.

Diversification Opportunities for Precision Drilling and BeMetals Corp

0.0

Correlation Coefficient

Precision Drilling  BeMetals Corp

Pay attention - limited upside

The 3 months correlation between Precision and BeMetals is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Precision Drilling and BeMetals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BeMetals Corp and Precision 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 Precision Drilling are associated (or correlated) with BeMetals Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BeMetals Corp has no effect on the direction of Precision Drilling i.e., Precision Drilling and BeMetals Corp go up and down completely randomly.

Pair Corralation between Precision Drilling and BeMetals Corp

If you would invest  8,023  in Precision Drilling on October 23, 2024 and sell it today you would earn a total of  1,569  from holding Precision Drilling or generate 19.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.64%
Values	Daily Returns

Precision Drilling  vs.  BeMetals Corp

Precision Drilling

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Precision Drilling are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Precision Drilling displayed solid returns over the last few months and may actually be approaching a breakup point.

BeMetals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BeMetals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, BeMetals Corp is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Precision Drilling and BeMetals Corp

The main advantage of trading using opposite Precision Drilling and BeMetals Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Precision Drilling position performs unexpectedly, BeMetals Corp 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 BeMetals Corp will offset losses from the drop in BeMetals Corp's long position.

The idea behind Precision Drilling and BeMetals Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.