Correlation Between NIP Group and Prairie Operating
Can any of the company-specific risk be diversified away by investing in both NIP Group 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 NIP Group and Prairie Operating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NIP Group American and Prairie Operating Co, you can compare the effects of market volatilities on NIP Group 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 NIP Group with a short position of Prairie Operating. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIP Group and Prairie Operating.
Diversification Opportunities for NIP Group and Prairie Operating
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NIP and Prairie is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding NIP Group American and Prairie Operating Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prairie Operating and NIP Group 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 NIP Group American 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 NIP Group i.e., NIP Group and Prairie Operating go up and down completely randomly.
Pair Corralation between NIP Group and Prairie Operating
Given the investment horizon of 90 days NIP Group American is expected to under-perform the Prairie Operating. But the stock apears to be less risky and, when comparing its historical volatility, NIP Group American is 1.77 times less risky than Prairie Operating. The stock trades about -0.08 of its potential returns per unit of risk. The Prairie Operating Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 801.00 in Prairie Operating Co on September 2, 2024 and sell it today you would earn a total of 50.00 from holding Prairie Operating Co or generate 6.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NIP Group American vs. Prairie Operating Co
Performance |
| Timeline |
| NIP Group American |
| Prairie Operating |
NIP Group and Prairie Operating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NIP Group and Prairie Operating
The main advantage of trading using opposite NIP Group and Prairie Operating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIP Group 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.| NIP Group vs. Vera Bradley | NIP Group vs. Nike Inc | NIP Group vs. JD Sports Fashion | NIP Group vs. Burlington Stores |
| Prairie Operating vs. Willamette Valley Vineyards | Prairie Operating vs. Diageo PLC ADR | Prairie Operating vs. National Beverage Corp | Prairie Operating vs. Getty Realty |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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