Correlation Between Prairie Provident and EQT
Can any of the company-specific risk be diversified away by investing in both Prairie Provident and EQT 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 EQT 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 EQT Corporation, you can compare the effects of market volatilities on Prairie Provident and EQT 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 EQT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prairie Provident and EQT.
Diversification Opportunities for Prairie Provident and EQT
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Prairie and EQT is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Prairie Provident Resources and EQT Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EQT Corporation 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 EQT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EQT Corporation has no effect on the direction of Prairie Provident i.e., Prairie Provident and EQT go up and down completely randomly.
Pair Corralation between Prairie Provident and EQT
Assuming the 90 days horizon Prairie Provident Resources is expected to under-perform the EQT. In addition to that, Prairie Provident is 3.75 times more volatile than EQT Corporation. It trades about -0.01 of its total potential returns per unit of risk. EQT Corporation is currently generating about 0.4 per unit of volatility. If you would invest 3,638 in EQT Corporation on September 1, 2024 and sell it today you would earn a total of 906.00 from holding EQT Corporation or generate 24.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prairie Provident Resources vs. EQT Corp.
Performance |
| Timeline |
| Prairie Provident |
| EQT Corporation |
Prairie Provident and EQT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prairie Provident and EQT
The main advantage of trading using opposite Prairie Provident and EQT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prairie Provident position performs unexpectedly, EQT 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 EQT will offset losses from the drop in EQT's long position.| Prairie Provident vs. San Leon Energy | Prairie Provident vs. Enwell Energy plc | Prairie Provident vs. Dno ASA | Prairie Provident vs. Questerre Energy |
| EQT vs. Antero Resources Corp | EQT vs. Matador Resources | EQT vs. Devon Energy | EQT vs. Diamondback Energy |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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