Correlation Between XXIX Metal and Stampede Drilling

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

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

Diversification Opportunities for XXIX Metal and Stampede Drilling

0.51

Correlation Coefficient

XXIX Metal  Stampede Drilling

Very weak diversification

The 3 months correlation between XXIX and Stampede is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding XXIX Metal Corp and Stampede Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stampede Drilling and XXIX Metal 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 XXIX Metal Corp are associated (or correlated) with Stampede Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stampede Drilling has no effect on the direction of XXIX Metal i.e., XXIX Metal and Stampede Drilling go up and down completely randomly.

Pair Corralation between XXIX Metal and Stampede Drilling

Assuming the 90 days trading horizon XXIX Metal Corp is expected to generate 2.1 times more return on investment than Stampede Drilling. However, XXIX Metal is 2.1 times more volatile than Stampede Drilling. It trades about 0.03 of its potential returns per unit of risk. Stampede Drilling is currently generating about -0.09 per unit of risk. If you would invest  12.00  in XXIX Metal Corp on October 11, 2024 and sell it today you would earn a total of  0.00  from holding XXIX Metal Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

XXIX Metal Corp  vs.  Stampede Drilling

XXIX Metal Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

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

Pair Trading with XXIX Metal and Stampede Drilling

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

The idea behind XXIX Metal Corp and Stampede Drilling 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.