Correlation Between Petroleo Brasileiro and China Southern
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By analyzing existing cross correlation between Petroleo Brasileiro Petrobras and China Southern SSE, you can compare the effects of market volatilities on Petroleo Brasileiro and China Southern 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 Southern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and China Southern.
Diversification Opportunities for Petroleo Brasileiro and China Southern
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Petroleo and China is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and China Southern SSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Southern SSE 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 Southern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Southern SSE has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and China Southern go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and China Southern
Considering the 90-day investment horizon Petroleo Brasileiro is expected to generate 1.28 times less return on investment than China Southern. In addition to that, Petroleo Brasileiro is 1.15 times more volatile than China Southern SSE. It trades about 0.02 of its total potential returns per unit of risk. China Southern SSE is currently generating about 0.04 per unit of volatility. If you would invest 184.00 in China Southern SSE on September 12, 2024 and sell it today you would earn a total of 21.00 from holding China Southern SSE or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.97% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. China Southern SSE
Performance |
| Timeline |
| Petroleo Brasileiro |
| China Southern SSE |
Petroleo Brasileiro and China Southern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and China Southern
The main advantage of trading using opposite Petroleo Brasileiro and China Southern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, China Southern 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 Southern will offset losses from the drop in China Southern'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 Southern vs. Shenzhen MTC Co | China Southern vs. Ming Yang Smart | China Southern vs. Changzhou Almaden Co | China Southern vs. 159681 |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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