Correlation Between Petroleo Brasileiro and Moneysupermarket
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Moneysupermarket 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 Petroleo Brasileiro and Moneysupermarket into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petroleo Brasileiro Petrobras and Moneysupermarket Group PLC, you can compare the effects of market volatilities on Petroleo Brasileiro and Moneysupermarket 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 Moneysupermarket. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Moneysupermarket.
Diversification Opportunities for Petroleo Brasileiro and Moneysupermarket
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Petroleo and Moneysupermarket is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Moneysupermarket Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moneysupermarket 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 Moneysupermarket. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moneysupermarket has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Moneysupermarket go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Moneysupermarket
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to under-perform the Moneysupermarket. In addition to that, Petroleo Brasileiro is 1.4 times more volatile than Moneysupermarket Group PLC. It trades about -0.02 of its total potential returns per unit of risk. Moneysupermarket Group PLC is currently generating about 0.16 per unit of volatility. If you would invest 215.00 in Moneysupermarket Group PLC on September 14, 2024 and sell it today you would earn a total of 11.00 from holding Moneysupermarket Group PLC or generate 5.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. Moneysupermarket Group PLC
Performance |
| Timeline |
| Petroleo Brasileiro |
| Moneysupermarket |
Petroleo Brasileiro and Moneysupermarket Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Moneysupermarket
The main advantage of trading using opposite Petroleo Brasileiro and Moneysupermarket positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Moneysupermarket 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 Moneysupermarket will offset losses from the drop in Moneysupermarket'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 |
| Moneysupermarket vs. FUTURE GAMING GRP | Moneysupermarket vs. HOCHSCHILD MINING | Moneysupermarket vs. JIAHUA STORES | Moneysupermarket vs. National Retail Properties |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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