Correlation Between Petroleo Brasileiro and 5I5j Holding
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By analyzing existing cross correlation between Petroleo Brasileiro Petrobras and 5I5j Holding Group, you can compare the effects of market volatilities on Petroleo Brasileiro and 5I5j Holding 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 5I5j Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and 5I5j Holding.
Diversification Opportunities for Petroleo Brasileiro and 5I5j Holding
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Petroleo and 5I5j is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and 5I5j Holding Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 5I5j Holding Group 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 5I5j Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 5I5j Holding Group has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and 5I5j Holding go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and 5I5j Holding
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to under-perform the 5I5j Holding. But the stock apears to be less risky and, when comparing its historical volatility, Petroleo Brasileiro Petrobras is 2.55 times less risky than 5I5j Holding. The stock trades about -0.01 of its potential returns per unit of risk. The 5I5j Holding Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 244.00 in 5I5j Holding Group on September 27, 2024 and sell it today you would earn a total of 74.00 from holding 5I5j Holding Group or generate 30.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.8% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. 5I5j Holding Group
Performance |
| Timeline |
| Petroleo Brasileiro |
| 5I5j Holding Group |
Petroleo Brasileiro and 5I5j Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and 5I5j Holding
The main advantage of trading using opposite Petroleo Brasileiro and 5I5j Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, 5I5j Holding 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 5I5j Holding will offset losses from the drop in 5I5j Holding'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 |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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