Correlation Between Stampede Drilling and ISign Media

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Stampede Drilling and ISign Media 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 ISign Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stampede Drilling and iSign Media Solutions, you can compare the effects of market volatilities on Stampede Drilling and ISign Media 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 ISign Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stampede Drilling and ISign Media.

Diversification Opportunities for Stampede Drilling and ISign Media

0.09
  Correlation Coefficient

Significant diversification

The 3 months correlation between Stampede and ISign is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Stampede Drilling and iSign Media Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iSign Media Solutions 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 ISign Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iSign Media Solutions has no effect on the direction of Stampede Drilling i.e., Stampede Drilling and ISign Media go up and down completely randomly.

Pair Corralation between Stampede Drilling and ISign Media

Assuming the 90 days horizon Stampede Drilling is expected to under-perform the ISign Media. But the stock apears to be less risky and, when comparing its historical volatility, Stampede Drilling is 18.38 times less risky than ISign Media. The stock trades about -0.02 of its potential returns per unit of risk. The iSign Media Solutions is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1.00  in iSign Media Solutions on October 2, 2024 and sell it today you would earn a total of  1,367  from holding iSign Media Solutions or generate 136700.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy99.6%
ValuesDaily Returns

Stampede Drilling  vs.  iSign Media Solutions

 Performance 
       Timeline  
Stampede Drilling 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.
iSign Media Solutions 

Risk-Adjusted Performance

0 of 100

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

Stampede Drilling and ISign Media Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Stampede Drilling and ISign Media

The main advantage of trading using opposite Stampede Drilling and ISign Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stampede Drilling position performs unexpectedly, ISign Media 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 ISign Media will offset losses from the drop in ISign Media's long position.
The idea behind Stampede Drilling and iSign Media Solutions 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.
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

Other Complementary Tools

Latest Portfolios
Quick portfolio dashboard that showcases your latest portfolios
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Odds Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years