Correlation Between Stampede Drilling and Condor Energies

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

By analyzing existing cross correlation between Stampede Drilling and Condor Energies, you can compare the effects of market volatilities on Stampede Drilling and Condor Energies 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 Condor Energies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stampede Drilling and Condor Energies.

Diversification Opportunities for Stampede Drilling and Condor Energies

0.77

Correlation Coefficient

Stampede Drilling  Condor Energies

Poor diversification

The 3 months correlation between Stampede and Condor is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Stampede Drilling and Condor Energies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Condor Energies 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 Condor Energies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Condor Energies has no effect on the direction of Stampede Drilling i.e., Stampede Drilling and Condor Energies go up and down completely randomly.

Pair Corralation between Stampede Drilling and Condor Energies

Assuming the 90 days horizon Stampede Drilling is expected to generate 1.0 times more return on investment than Condor Energies. However, Stampede Drilling is 1.0 times less risky than Condor Energies. It trades about -0.06 of its potential returns per unit of risk. Condor Energies is currently generating about -0.13 per unit of risk. If you would invest  22.00  in Stampede Drilling on October 24, 2024 and sell it today you would lose (3.00) from holding Stampede Drilling or give up 13.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Stampede Drilling  vs.  Condor Energies

Stampede Drilling

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stampede Drilling has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Condor Energies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Condor Energies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Stampede Drilling and Condor Energies

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

The idea behind Stampede Drilling and Condor Energies 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.