Correlation Between Petroleo Brasileiro and Crescendo Bhd
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Crescendo Bhd 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 Crescendo Bhd 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 Crescendo Bhd, you can compare the effects of market volatilities on Petroleo Brasileiro and Crescendo Bhd 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 Crescendo Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Crescendo Bhd.
Diversification Opportunities for Petroleo Brasileiro and Crescendo Bhd
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Petroleo and Crescendo is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Crescendo Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crescendo Bhd 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 Crescendo Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crescendo Bhd has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Crescendo Bhd go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Crescendo Bhd
Considering the 90-day investment horizon Petroleo Brasileiro is expected to generate 5.68 times less return on investment than Crescendo Bhd. But when comparing it to its historical volatility, Petroleo Brasileiro Petrobras is 1.36 times less risky than Crescendo Bhd. It trades about 0.09 of its potential returns per unit of risk. Crescendo Bhd is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 116.00 in Crescendo Bhd on September 13, 2024 and sell it today you would earn a total of 27.00 from holding Crescendo Bhd or generate 23.28% 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. Crescendo Bhd
Performance |
| Timeline |
| Petroleo Brasileiro |
| Crescendo Bhd |
Petroleo Brasileiro and Crescendo Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Crescendo Bhd
The main advantage of trading using opposite Petroleo Brasileiro and Crescendo Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Crescendo Bhd 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 Crescendo Bhd will offset losses from the drop in Crescendo Bhd'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 |
| Crescendo Bhd vs. Malayan Banking Bhd | Crescendo Bhd vs. Public Bank Bhd | Crescendo Bhd vs. Petronas Chemicals Group | Crescendo Bhd vs. Tenaga Nasional Bhd |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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