Correlation Between Precision Drilling and Contextlogic
Can any of the company-specific risk be diversified away by investing in both Precision Drilling and Contextlogic 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 Precision Drilling and Contextlogic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Precision Drilling and Contextlogic, you can compare the effects of market volatilities on Precision Drilling and Contextlogic 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 Precision Drilling with a short position of Contextlogic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Precision Drilling and Contextlogic.
Diversification Opportunities for Precision Drilling and Contextlogic
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Precision and Contextlogic is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Precision Drilling and Contextlogic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contextlogic and Precision 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 Precision Drilling are associated (or correlated) with Contextlogic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contextlogic has no effect on the direction of Precision Drilling i.e., Precision Drilling and Contextlogic go up and down completely randomly.
Pair Corralation between Precision Drilling and Contextlogic
Considering the 90-day investment horizon Precision Drilling is expected to generate 0.68 times more return on investment than Contextlogic. However, Precision Drilling is 1.48 times less risky than Contextlogic. It trades about 0.16 of its potential returns per unit of risk. Contextlogic is currently generating about 0.07 per unit of risk. If you would invest 4,090 in Precision Drilling on April 10, 2025 and sell it today you would earn a total of 1,019 from holding Precision Drilling or generate 24.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 81.97% |
| Values | Daily Returns |
Precision Drilling vs. Contextlogic
Performance |
| Timeline |
| Precision Drilling |
| Contextlogic |
Precision Drilling and Contextlogic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Precision Drilling and Contextlogic
The main advantage of trading using opposite Precision Drilling and Contextlogic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Precision Drilling position performs unexpectedly, Contextlogic 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 Contextlogic will offset losses from the drop in Contextlogic's long position.| Precision Drilling vs. Kaival Brands Innovations | Precision Drilling vs. Anheuser Busch Inbev | Precision Drilling vs. Ryder System | Precision Drilling vs. Custom Truck One |
| Contextlogic vs. Corning Incorporated | Contextlogic vs. American Airlines Group | Contextlogic vs. Nok Airlines Public | Contextlogic vs. BlueScope Steel Ltd |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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