Correlation Between Stampede Drilling and Baselode Energy

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

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

Diversification Opportunities for Stampede Drilling and Baselode Energy

0.26

Correlation Coefficient

Stampede Drilling  Baselode Energy

Modest diversification

The 3 months correlation between Stampede and Baselode is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Stampede Drilling and Baselode Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baselode Energy Corp 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 Baselode Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baselode Energy Corp has no effect on the direction of Stampede Drilling i.e., Stampede Drilling and Baselode Energy go up and down completely randomly.

Pair Corralation between Stampede Drilling and Baselode Energy

Assuming the 90 days horizon Stampede Drilling is expected to generate 0.56 times more return on investment than Baselode Energy. However, Stampede Drilling is 1.78 times less risky than Baselode Energy. It trades about 0.0 of its potential returns per unit of risk. Baselode Energy Corp is currently generating about -0.01 per unit of risk. If you would invest  18.00  in Stampede Drilling on December 3, 2024 and sell it today you would lose (1.00) from holding Stampede Drilling or give up 5.56% of portfolio value over 90 days.

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

Stampede Drilling  vs.  Baselode Energy Corp

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.

Baselode Energy Corp

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Stampede Drilling and Baselode Energy

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

The idea behind Stampede Drilling and Baselode Energy 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.