Correlation Between Stampede Drilling and Enbridge

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

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

Diversification Opportunities for Stampede Drilling and Enbridge

-0.74

Correlation Coefficient

Stampede Drilling  Enbridge

Pay attention - limited upside

The 3 months correlation between Stampede and Enbridge is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Stampede Drilling and Enbridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge 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 Enbridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enbridge has no effect on the direction of Stampede Drilling i.e., Stampede Drilling and Enbridge go up and down completely randomly.

Pair Corralation between Stampede Drilling and Enbridge

Assuming the 90 days horizon Stampede Drilling is expected to under-perform the Enbridge. In addition to that, Stampede Drilling is 7.25 times more volatile than Enbridge. It trades about -0.01 of its total potential returns per unit of risk. Enbridge is currently generating about 0.14 per unit of volatility. If you would invest  2,056  in Enbridge on December 24, 2024 and sell it today you would earn a total of  139.00  from holding Enbridge or generate 6.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Stampede Drilling  vs.  Enbridge

Stampede Drilling

Risk-Adjusted Performance

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 fairly stable basic indicators, Stampede Drilling is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Enbridge

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Enbridge are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental drivers, Enbridge may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Stampede Drilling and Enbridge

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

The idea behind Stampede Drilling and Enbridge 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.