Correlation Between Petroleo Brasileiro and Jiangxi Lianchuang
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By analyzing existing cross correlation between Petroleo Brasileiro Petrobras and Jiangxi Lianchuang Opto electronic, you can compare the effects of market volatilities on Petroleo Brasileiro and Jiangxi Lianchuang 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 Jiangxi Lianchuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Jiangxi Lianchuang.
Diversification Opportunities for Petroleo Brasileiro and Jiangxi Lianchuang
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Petroleo and Jiangxi is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Jiangxi Lianchuang Opto electr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Lianchuang Opto 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 Jiangxi Lianchuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Lianchuang Opto has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Jiangxi Lianchuang go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Jiangxi Lianchuang
Considering the 90-day investment horizon Petroleo Brasileiro is expected to generate 33.74 times less return on investment than Jiangxi Lianchuang. But when comparing it to its historical volatility, Petroleo Brasileiro Petrobras is 3.55 times less risky than Jiangxi Lianchuang. It trades about 0.02 of its potential returns per unit of risk. Jiangxi Lianchuang Opto electronic is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 3,236 in Jiangxi Lianchuang Opto electronic on September 19, 2024 and sell it today you would earn a total of 1,204 from holding Jiangxi Lianchuang Opto electronic or generate 37.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. Jiangxi Lianchuang Opto electr
Performance |
| Timeline |
| Petroleo Brasileiro |
| Jiangxi Lianchuang Opto |
Petroleo Brasileiro and Jiangxi Lianchuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Jiangxi Lianchuang
The main advantage of trading using opposite Petroleo Brasileiro and Jiangxi Lianchuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Jiangxi Lianchuang 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 Jiangxi Lianchuang will offset losses from the drop in Jiangxi Lianchuang'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 |
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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