Correlation Between Petroleo Brasileiro and BJs Wholesale
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and BJs Wholesale 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 BJs Wholesale 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 BJs Wholesale Club, you can compare the effects of market volatilities on Petroleo Brasileiro and BJs Wholesale 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 BJs Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and BJs Wholesale.
Diversification Opportunities for Petroleo Brasileiro and BJs Wholesale
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Petroleo and BJs is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and BJs Wholesale Club in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Wholesale Club 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 BJs Wholesale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BJs Wholesale Club has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and BJs Wholesale go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and BJs Wholesale
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to under-perform the BJs Wholesale. But the stock apears to be less risky and, when comparing its historical volatility, Petroleo Brasileiro Petrobras is 1.15 times less risky than BJs Wholesale. The stock trades about -0.06 of its potential returns per unit of risk. The BJs Wholesale Club is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 8,681 in BJs Wholesale Club on September 18, 2024 and sell it today you would earn a total of 1,074 from holding BJs Wholesale Club or generate 12.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. BJs Wholesale Club
Performance |
| Timeline |
| Petroleo Brasileiro |
| BJs Wholesale Club |
Petroleo Brasileiro and BJs Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and BJs Wholesale
The main advantage of trading using opposite Petroleo Brasileiro and BJs Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, BJs Wholesale 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 BJs Wholesale will offset losses from the drop in BJs Wholesale'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 |
| BJs Wholesale vs. Dollar Tree | BJs Wholesale vs. Dicks Sporting Goods | BJs Wholesale vs. Williams Sonoma | BJs Wholesale vs. Dillards |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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