Correlation Between Prairie Provident and Altima Resources
Can any of the company-specific risk be diversified away by investing in both Prairie Provident and Altima Resources 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 Altima Resources 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 Altima Resources, you can compare the effects of market volatilities on Prairie Provident and Altima Resources 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 Altima Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prairie Provident and Altima Resources.
Diversification Opportunities for Prairie Provident and Altima Resources
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Prairie and Altima is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Prairie Provident Resources and Altima Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altima Resources 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 Altima Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altima Resources has no effect on the direction of Prairie Provident i.e., Prairie Provident and Altima Resources go up and down completely randomly.
Pair Corralation between Prairie Provident and Altima Resources
Assuming the 90 days horizon Prairie Provident Resources is expected to generate 0.8 times more return on investment than Altima Resources. However, Prairie Provident Resources is 1.25 times less risky than Altima Resources. It trades about 0.01 of its potential returns per unit of risk. Altima Resources is currently generating about -0.03 per unit of risk. If you would invest 2.08 in Prairie Provident Resources on August 17, 2025 and sell it today you would lose (0.27) from holding Prairie Provident Resources or give up 12.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Prairie Provident Resources vs. Altima Resources
Performance |
| Timeline |
| Prairie Provident |
| Altima Resources |
Prairie Provident and Altima Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prairie Provident and Altima Resources
The main advantage of trading using opposite Prairie Provident and Altima Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prairie Provident position performs unexpectedly, Altima Resources 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 Altima Resources will offset losses from the drop in Altima Resources' long position.| Prairie Provident vs. Petro Victory Energy Corp | Prairie Provident vs. Elixir Energy Limited | Prairie Provident vs. ADX Energy | Prairie Provident vs. The Reserve Petroleum |
| Altima Resources vs. Challenger Energy Group | Altima Resources vs. Petro Matad Limited | Altima Resources vs. Guardian Exploration | Altima Resources vs. Eco Oil Gas |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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