Correlation Between Petroleo Brasileiro and Good Finance
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Good Finance 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 Good Finance 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 Good Finance Securities, you can compare the effects of market volatilities on Petroleo Brasileiro and Good Finance 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 Good Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Good Finance.
Diversification Opportunities for Petroleo Brasileiro and Good Finance
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Petroleo and Good is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Good Finance Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Good Finance Securities 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 Good Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Good Finance Securities has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Good Finance go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Good Finance
Considering the 90-day investment horizon Petroleo Brasileiro is expected to generate 21.69 times less return on investment than Good Finance. But when comparing it to its historical volatility, Petroleo Brasileiro Petrobras is 1.27 times less risky than Good Finance. It trades about 0.01 of its potential returns per unit of risk. Good Finance Securities is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,480 in Good Finance Securities on September 14, 2024 and sell it today you would earn a total of 920.00 from holding Good Finance Securities or generate 62.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.59% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. Good Finance Securities
Performance |
| Timeline |
| Petroleo Brasileiro |
| Good Finance Securities |
Petroleo Brasileiro and Good Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Good Finance
The main advantage of trading using opposite Petroleo Brasileiro and Good Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Good Finance 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 Good Finance will offset losses from the drop in Good Finance'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 |
| Good Finance vs. IBF Financial Holdings | Good Finance vs. Capital Securities Corp | Good Finance vs. President Securities Corp | Good Finance vs. China Bills Finance |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |