Correlation Between Petroleo Brasileiro and AMPACS Corp
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and AMPACS Corp 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 AMPACS Corp 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 AMPACS Corp, you can compare the effects of market volatilities on Petroleo Brasileiro and AMPACS Corp 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 AMPACS Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and AMPACS Corp.
Diversification Opportunities for Petroleo Brasileiro and AMPACS Corp
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Petroleo and AMPACS is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and AMPACS Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMPACS Corp 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 AMPACS Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMPACS Corp has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and AMPACS Corp go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and AMPACS Corp
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to generate 1.01 times more return on investment than AMPACS Corp. However, Petroleo Brasileiro is 1.01 times more volatile than AMPACS Corp. It trades about 0.21 of its potential returns per unit of risk. AMPACS Corp is currently generating about -0.35 per unit of risk. If you would invest 1,335 in Petroleo Brasileiro Petrobras on December 30, 2024 and sell it today you would earn a total of 103.00 from holding Petroleo Brasileiro Petrobras or generate 7.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. AMPACS Corp
Performance |
| Timeline |
| Petroleo Brasileiro |
| AMPACS Corp |
Petroleo Brasileiro and AMPACS Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and AMPACS Corp
The main advantage of trading using opposite Petroleo Brasileiro and AMPACS Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, AMPACS Corp 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 AMPACS Corp will offset losses from the drop in AMPACS Corp's long position.| Petroleo Brasileiro vs. BP PLC ADR | Petroleo Brasileiro vs. Shell PLC ADR | Petroleo Brasileiro vs. Suncor Energy | Petroleo Brasileiro vs. Petrleo Brasileiro SA |
| AMPACS Corp vs. Auden Techno | AMPACS Corp vs. VIA Labs | AMPACS Corp vs. Orient Semiconductor Electronics | AMPACS Corp vs. AP Memory Technology |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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