Correlation Between Petroleo Brasileiro and Bonhote Immobilier
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Bonhote Immobilier 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 Bonhote Immobilier 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 Bonhote Immobilier SICAV BIM, you can compare the effects of market volatilities on Petroleo Brasileiro and Bonhote Immobilier 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 Bonhote Immobilier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Bonhote Immobilier.
Diversification Opportunities for Petroleo Brasileiro and Bonhote Immobilier
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Petroleo and Bonhote is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Bonhote Immobilier SICAV BIM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonhote Immobilier 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 Bonhote Immobilier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonhote Immobilier has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Bonhote Immobilier go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Bonhote Immobilier
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to under-perform the Bonhote Immobilier. In addition to that, Petroleo Brasileiro is 1.74 times more volatile than Bonhote Immobilier SICAV BIM. It trades about -0.16 of its total potential returns per unit of risk. Bonhote Immobilier SICAV BIM is currently generating about 0.28 per unit of volatility. If you would invest 15,150 in Bonhote Immobilier SICAV BIM on September 19, 2024 and sell it today you would earn a total of 1,250 from holding Bonhote Immobilier SICAV BIM or generate 8.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.65% |
Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. Bonhote Immobilier SICAV BIM
Performance |
Timeline |
Petroleo Brasileiro |
Bonhote Immobilier |
Petroleo Brasileiro and Bonhote Immobilier Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Petroleo Brasileiro and Bonhote Immobilier
The main advantage of trading using opposite Petroleo Brasileiro and Bonhote Immobilier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Bonhote Immobilier 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 Bonhote Immobilier will offset losses from the drop in Bonhote Immobilier'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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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