Correlation Between Pipestone Energy and Prospera Energy

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

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

Diversification Opportunities for Pipestone Energy and Prospera Energy

0.0

Correlation Coefficient

Pipestone Energy  Prospera Energy

Pay attention - limited upside

The 3 months correlation between Pipestone and Prospera is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Pipestone Energy Corp and Prospera Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prospera Energy and Pipestone Energy 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 Pipestone Energy Corp are associated (or correlated) with Prospera Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prospera Energy has no effect on the direction of Pipestone Energy i.e., Pipestone Energy and Prospera Energy go up and down completely randomly.

Pair Corralation between Pipestone Energy and Prospera Energy

If you would invest  1.81  in Prospera Energy on December 30, 2024 and sell it today you would earn a total of  0.29  from holding Prospera Energy or generate 16.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Pipestone Energy Corp  vs.  Prospera Energy

Pipestone Energy Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pipestone Energy Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Pipestone Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Prospera Energy

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Prospera Energy are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Prospera Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pipestone Energy and Prospera Energy

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

The idea behind Pipestone Energy Corp and Prospera Energy 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..