Correlation Between OSX Brasil and Petrleo Brasileiro
Can any of the company-specific risk be diversified away by investing in both OSX Brasil and Petrleo 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 OSX Brasil and Petrleo Brasileiro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OSX Brasil SA and Petrleo Brasileiro SA, you can compare the effects of market volatilities on OSX Brasil and Petrleo 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 OSX Brasil with a short position of Petrleo Brasileiro. Check out your portfolio center. Please also check ongoing floating volatility patterns of OSX Brasil and Petrleo Brasileiro.
Diversification Opportunities for OSX Brasil and Petrleo Brasileiro
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between OSX and Petrleo is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding OSX Brasil SA and Petrleo Brasileiro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrleo Brasileiro and OSX Brasil 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 OSX Brasil SA are associated (or correlated) with Petrleo Brasileiro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrleo Brasileiro has no effect on the direction of OSX Brasil i.e., OSX Brasil and Petrleo Brasileiro go up and down completely randomly.
Pair Corralation between OSX Brasil and Petrleo Brasileiro
Assuming the 90 days trading horizon OSX Brasil is expected to generate 1.34 times less return on investment than Petrleo Brasileiro. In addition to that, OSX Brasil is 3.0 times more volatile than Petrleo Brasileiro SA. It trades about 0.02 of its total potential returns per unit of risk. Petrleo Brasileiro SA is currently generating about 0.08 per unit of volatility. If you would invest 2,674 in Petrleo Brasileiro SA on August 28, 2024 and sell it today you would earn a total of 1,608 from holding Petrleo Brasileiro SA or generate 60.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.15% |
| Values | Daily Returns |
OSX Brasil SA vs. Petrleo Brasileiro SA
Performance |
| Timeline |
| OSX Brasil SA |
| Petrleo Brasileiro |
OSX Brasil and Petrleo Brasileiro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OSX Brasil and Petrleo Brasileiro
The main advantage of trading using opposite OSX Brasil and Petrleo Brasileiro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OSX Brasil position performs unexpectedly, Petrleo 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 Petrleo Brasileiro will offset losses from the drop in Petrleo Brasileiro's long position.| OSX Brasil vs. METISA Metalrgica Timboense | OSX Brasil vs. MAHLE Metal Leve | OSX Brasil vs. Healthpeak Properties | OSX Brasil vs. Charter Communications |
| Petrleo Brasileiro vs. Vale SA | Petrleo Brasileiro vs. Petrleo Brasileiro SA | Petrleo Brasileiro vs. Banco do Brasil | Petrleo Brasileiro vs. Banco Bradesco 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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