Correlation Between Petroleo Brasileiro and China Union
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By analyzing existing cross correlation between Petroleo Brasileiro Petrobras and China Union Holdings, you can compare the effects of market volatilities on Petroleo Brasileiro and China Union 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 Petroleo Brasileiro with a short position of China Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and China Union.
Diversification Opportunities for Petroleo Brasileiro and China Union
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Petroleo and China is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and China Union Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Union Holdings and Petroleo Brasileiro 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 Petroleo Brasileiro Petrobras are associated (or correlated) with China Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Union Holdings has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and China Union go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and China Union
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to generate 0.85 times more return on investment than China Union. However, Petroleo Brasileiro Petrobras is 1.18 times less risky than China Union. It trades about -0.19 of its potential returns per unit of risk. China Union Holdings is currently generating about -0.62 per unit of risk. If you would invest 1,412 in Petroleo Brasileiro Petrobras on September 27, 2024 and sell it today you would lose (109.00) from holding Petroleo Brasileiro Petrobras or give up 7.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. China Union Holdings
Performance |
| Timeline |
| Petroleo Brasileiro |
| China Union Holdings |
Petroleo Brasileiro and China Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and China Union
The main advantage of trading using opposite Petroleo Brasileiro and China Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, China Union 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 China Union will offset losses from the drop in China Union's long position.| Petroleo Brasileiro vs. Ecopetrol SA ADR | Petroleo Brasileiro vs. Equinor ASA ADR | Petroleo Brasileiro vs. Eni SpA ADR | Petroleo Brasileiro vs. Cenovus Energy |
| China Union vs. PetroChina Co Ltd | China Union vs. China Mobile Limited | China Union vs. CNOOC Limited | China Union vs. Ping An Insurance |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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