Correlation Between Kolibri Global and Prairie Provident

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

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

Diversification Opportunities for Kolibri Global and Prairie Provident

-0.69

Correlation Coefficient

Kolibri Global  Prairie Provident

Excellent diversification

The 3 months correlation between Kolibri and Prairie is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Kolibri Global Energy and Prairie Provident Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prairie Provident and Kolibri Global 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 Kolibri Global Energy are associated (or correlated) with Prairie Provident. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prairie Provident has no effect on the direction of Kolibri Global i.e., Kolibri Global and Prairie Provident go up and down completely randomly.

Pair Corralation between Kolibri Global and Prairie Provident

If you would invest  2.78  in Prairie Provident Resources on September 3, 2024 and sell it today you would lose (0.58) from holding Prairie Provident Resources or give up 20.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Kolibri Global Energy  vs.  Prairie Provident Resources

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.

Prairie Provident

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Prairie Provident Resources are ranked lower than 2 (%) 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.

Pair Trading with Kolibri Global and Prairie Provident

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

The idea behind Kolibri Global Energy and Prairie Provident Resources 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.