Correlation Between Atrys Health and Petroleo Brasileiro
Can any of the company-specific risk be diversified away by investing in both Atrys Health and Petroleo Brasileiro 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 Atrys Health and Petroleo Brasileiro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atrys Health SL and Petroleo Brasileiro SA, you can compare the effects of market volatilities on Atrys Health and Petroleo Brasileiro 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 Atrys Health with a short position of Petroleo Brasileiro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atrys Health and Petroleo Brasileiro.
Diversification Opportunities for Atrys Health and Petroleo Brasileiro
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Atrys and Petroleo is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Atrys Health SL and Petroleo Brasileiro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petroleo Brasileiro and Atrys Health 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 Atrys Health SL are associated (or correlated) with Petroleo Brasileiro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petroleo Brasileiro has no effect on the direction of Atrys Health i.e., Atrys Health and Petroleo Brasileiro go up and down completely randomly.
Pair Corralation between Atrys Health and Petroleo Brasileiro
Assuming the 90 days trading horizon Atrys Health SL is expected to under-perform the Petroleo Brasileiro. But the stock apears to be less risky and, when comparing its historical volatility, Atrys Health SL is 1.31 times less risky than Petroleo Brasileiro. The stock trades about -0.08 of its potential returns per unit of risk. The Petroleo Brasileiro SA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 504.00 in Petroleo Brasileiro SA on September 1, 2024 and sell it today you would earn a total of 124.00 from holding Petroleo Brasileiro SA or generate 24.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atrys Health SL vs. Petroleo Brasileiro SA
Performance |
| Timeline |
| Atrys Health SL |
| Petroleo Brasileiro |
Atrys Health and Petroleo Brasileiro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atrys Health and Petroleo Brasileiro
The main advantage of trading using opposite Atrys Health and Petroleo Brasileiro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atrys Health position performs unexpectedly, Petroleo Brasileiro 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 Petroleo Brasileiro will offset losses from the drop in Petroleo Brasileiro's long position.The idea behind Atrys Health SL and Petroleo Brasileiro SA 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.| Petroleo Brasileiro vs. Repsol | Petroleo Brasileiro vs. Metrovacesa SA | Petroleo Brasileiro vs. Elecnor SA | Petroleo Brasileiro vs. Mapfre |
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 CEOs Directory module to screen CEOs from public companies around the world.
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