Correlation Between Petroleo Brasileiro and Amcor Plc
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Amcor Plc 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 Amcor Plc 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 Amcor plc, you can compare the effects of market volatilities on Petroleo Brasileiro and Amcor Plc 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 Amcor Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Amcor Plc.
Diversification Opportunities for Petroleo Brasileiro and Amcor Plc
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Petroleo and Amcor is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Amcor plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amcor plc 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 Amcor Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amcor plc has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Amcor Plc go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Amcor Plc
Considering the 90-day investment horizon Petroleo Brasileiro is expected to generate 3.35 times less return on investment than Amcor Plc. But when comparing it to its historical volatility, Petroleo Brasileiro Petrobras is 1.34 times less risky than Amcor Plc. It trades about 0.01 of its potential returns per unit of risk. Amcor plc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 940.00 in Amcor plc on September 13, 2024 and sell it today you would earn a total of 26.00 from holding Amcor plc or generate 2.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. Amcor plc
Performance |
| Timeline |
| Petroleo Brasileiro |
| Amcor plc |
Petroleo Brasileiro and Amcor Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Amcor Plc
The main advantage of trading using opposite Petroleo Brasileiro and Amcor Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Amcor Plc 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 Amcor Plc will offset losses from the drop in Amcor Plc's long position.| Petroleo Brasileiro vs. Aquagold International | Petroleo Brasileiro vs. Thrivent High Yield | Petroleo Brasileiro vs. Morningstar Unconstrained Allocation | Petroleo Brasileiro vs. Via Renewables |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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