Correlation Between Petroleo Brasileiro and Huadong Medicine
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By analyzing existing cross correlation between Petroleo Brasileiro Petrobras and Huadong Medicine Co, you can compare the effects of market volatilities on Petroleo Brasileiro and Huadong Medicine 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 Huadong Medicine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Huadong Medicine.
Diversification Opportunities for Petroleo Brasileiro and Huadong Medicine
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Petroleo and Huadong is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Huadong Medicine Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huadong Medicine 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 Huadong Medicine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huadong Medicine has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Huadong Medicine go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Huadong Medicine
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to generate 1.02 times more return on investment than Huadong Medicine. However, Petroleo Brasileiro is 1.02 times more volatile than Huadong Medicine Co. It trades about 0.07 of its potential returns per unit of risk. Huadong Medicine Co is currently generating about -0.03 per unit of risk. If you would invest 768.00 in Petroleo Brasileiro Petrobras on October 15, 2024 and sell it today you would earn a total of 580.00 from holding Petroleo Brasileiro Petrobras or generate 75.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.57% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. Huadong Medicine Co
Performance |
| Timeline |
| Petroleo Brasileiro |
| Huadong Medicine |
Petroleo Brasileiro and Huadong Medicine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Huadong Medicine
The main advantage of trading using opposite Petroleo Brasileiro and Huadong Medicine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Huadong Medicine 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 Huadong Medicine will offset losses from the drop in Huadong Medicine'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 |
| Huadong Medicine vs. Jiahe Foods Industry | Huadong Medicine vs. V V Food | Huadong Medicine vs. Shanghai Ziyan Foods | Huadong Medicine vs. Heilongjiang Transport Development |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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