Correlation Between New Frontier and Providence Resources
Can any of the company-specific risk be diversified away by investing in both New Frontier and Providence 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 New Frontier and Providence Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Frontier Energy and Providence Resources, you can compare the effects of market volatilities on New Frontier and Providence 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 New Frontier with a short position of Providence Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Frontier and Providence Resources.
Diversification Opportunities for New Frontier and Providence Resources
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between New and Providence is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding New Frontier Energy and Providence Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Providence Resources and New Frontier 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 New Frontier Energy are associated (or correlated) with Providence Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Providence Resources has no effect on the direction of New Frontier i.e., New Frontier and Providence Resources go up and down completely randomly.
Pair Corralation between New Frontier and Providence Resources
If you would invest 0.01 in New Frontier Energy on September 2, 2024 and sell it today you would earn a total of 0.00 from holding New Frontier Energy or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Frontier Energy vs. Providence Resources
Performance |
| Timeline |
| New Frontier Energy |
| Providence Resources |
New Frontier and Providence Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Frontier and Providence Resources
The main advantage of trading using opposite New Frontier and Providence Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Frontier position performs unexpectedly, Providence 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 Providence Resources will offset losses from the drop in Providence Resources' long position.| New Frontier vs. Permian Resources | New Frontier vs. Devon Energy | New Frontier vs. EOG Resources | New Frontier vs. Coterra Energy |
| Providence Resources vs. American Leisure Holdings | Providence Resources vs. Supurva Healthcare Group | Providence Resources vs. China Health Management | Providence Resources vs. Embrace Change Acquisition |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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