Correlation Between JHSF Participaes and 3R Petroleum
Can any of the company-specific risk be diversified away by investing in both JHSF Participaes and 3R Petroleum 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 JHSF Participaes and 3R Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JHSF Participaes SA and 3R Petroleum leo, you can compare the effects of market volatilities on JHSF Participaes and 3R Petroleum 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 JHSF Participaes with a short position of 3R Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of JHSF Participaes and 3R Petroleum.
Diversification Opportunities for JHSF Participaes and 3R Petroleum
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JHSF and RRRP3 is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding JHSF Participaes SA and 3R Petroleum leo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3R Petroleum leo and JHSF Participaes 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 JHSF Participaes SA are associated (or correlated) with 3R Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3R Petroleum leo has no effect on the direction of JHSF Participaes i.e., JHSF Participaes and 3R Petroleum go up and down completely randomly.
Pair Corralation between JHSF Participaes and 3R Petroleum
Assuming the 90 days trading horizon JHSF Participaes SA is expected to generate 0.9 times more return on investment than 3R Petroleum. However, JHSF Participaes SA is 1.12 times less risky than 3R Petroleum. It trades about 0.01 of its potential returns per unit of risk. 3R Petroleum leo is currently generating about -0.08 per unit of risk. If you would invest 431.00 in JHSF Participaes SA on September 4, 2024 and sell it today you would earn a total of 1.00 from holding JHSF Participaes SA or generate 0.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.76% |
| Values | Daily Returns |
JHSF Participaes SA vs. 3R Petroleum leo
Performance |
| Timeline |
| JHSF Participaes |
| 3R Petroleum leo |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
JHSF Participaes and 3R Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JHSF Participaes and 3R Petroleum
The main advantage of trading using opposite JHSF Participaes and 3R Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JHSF Participaes position performs unexpectedly, 3R Petroleum 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 3R Petroleum will offset losses from the drop in 3R Petroleum's long position.| JHSF Participaes vs. Tecnisa SA | JHSF Participaes vs. Cogna Educao SA | JHSF Participaes vs. Cyrela Brazil Realty | JHSF Participaes vs. Helbor Empreendimentos SA |
| 3R Petroleum vs. Petro Rio SA | 3R Petroleum vs. Banco BTG Pactual | 3R Petroleum vs. Ambipar Participaes e | 3R Petroleum vs. Mliuz SA |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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