Correlation Between Stampede Drilling and Thunderbird Entertainment

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

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

Diversification Opportunities for Stampede Drilling and Thunderbird Entertainment

0.16

Correlation Coefficient

Stampede Drilling  Thunderbird Entertainment

Average diversification

The 3 months correlation between Stampede and Thunderbird is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Stampede Drilling and Thunderbird Entertainment Grou in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunderbird Entertainment 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 Thunderbird Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunderbird Entertainment has no effect on the direction of Stampede Drilling i.e., Stampede Drilling and Thunderbird Entertainment go up and down completely randomly.

Pair Corralation between Stampede Drilling and Thunderbird Entertainment

Assuming the 90 days horizon Stampede Drilling is expected to under-perform the Thunderbird Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Stampede Drilling is 1.14 times less risky than Thunderbird Entertainment. The stock trades about -0.16 of its potential returns per unit of risk. The Thunderbird Entertainment Group is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  174.00  in Thunderbird Entertainment Group on September 21, 2024 and sell it today you would earn a total of  12.00  from holding Thunderbird Entertainment Group or generate 6.9% return on investment over 90 days.

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

Stampede Drilling  vs.  Thunderbird Entertainment Grou

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.

Thunderbird Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Stampede Drilling and Thunderbird Entertainment

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

The idea behind Stampede Drilling and Thunderbird Entertainment Group 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.