Correlation Between Bt Brands and Prairie Operating
Can any of the company-specific risk be diversified away by investing in both Bt Brands and Prairie Operating 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 Bt Brands and Prairie Operating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bt Brands and Prairie Operating Co, you can compare the effects of market volatilities on Bt Brands and Prairie Operating 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 Bt Brands with a short position of Prairie Operating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bt Brands and Prairie Operating.
Diversification Opportunities for Bt Brands and Prairie Operating
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between BTBD and Prairie is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Bt Brands and Prairie Operating Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prairie Operating and Bt Brands 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 Bt Brands are associated (or correlated) with Prairie Operating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prairie Operating has no effect on the direction of Bt Brands i.e., Bt Brands and Prairie Operating go up and down completely randomly.
Pair Corralation between Bt Brands and Prairie Operating
Given the investment horizon of 90 days Bt Brands is expected to generate 13.06 times less return on investment than Prairie Operating. But when comparing it to its historical volatility, Bt Brands is 1.39 times less risky than Prairie Operating. It trades about 0.01 of its potential returns per unit of risk. Prairie Operating Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 538.00 in Prairie Operating Co on August 28, 2024 and sell it today you would earn a total of 328.00 from holding Prairie Operating Co or generate 60.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bt Brands vs. Prairie Operating Co
Performance |
| Timeline |
| Bt Brands |
| Prairie Operating |
Bt Brands and Prairie Operating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bt Brands and Prairie Operating
The main advantage of trading using opposite Bt Brands and Prairie Operating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bt Brands position performs unexpectedly, Prairie Operating 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 Operating will offset losses from the drop in Prairie Operating's long position.| Bt Brands vs. Alsea SAB de | Bt Brands vs. Marstons PLC | Bt Brands vs. Bagger Daves Burger | Bt Brands vs. Marstons PLC |
| Prairie Operating vs. Freedom Holding Corp | Prairie Operating vs. SkyWest | Prairie Operating vs. Aldel Financial II | Prairie Operating vs. Citizens Bancorp 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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