Correlation Between Prairie Provident and Kolibri Global

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

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

Diversification Opportunities for Prairie Provident and Kolibri Global

-0.71

Correlation Coefficient

Prairie Provident  Kolibri Global

Pay attention - limited upside

The 3 months correlation between Prairie and Kolibri is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Prairie Provident Resources and Kolibri Global Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kolibri Global Energy and Prairie Provident 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 Prairie Provident Resources are associated (or correlated) with Kolibri Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kolibri Global Energy has no effect on the direction of Prairie Provident i.e., Prairie Provident and Kolibri Global go up and down completely randomly.

Pair Corralation between Prairie Provident and Kolibri Global

If you would invest  2.15  in Prairie Provident Resources on September 5, 2024 and sell it today you would lose (0.02) from holding Prairie Provident Resources or give up 0.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	4.55%
Values	Daily Returns

Prairie Provident Resources  vs.  Kolibri Global Energy

Prairie Provident

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Prairie Provident Resources are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting basic indicators, Prairie Provident reported solid returns over the last few months and may actually be approaching a breakup point.

Kolibri Global Energy

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Prairie Provident and Kolibri Global

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

The idea behind Prairie Provident Resources and Kolibri Global 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.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.