Correlation Between Petroleo Brasileiro and Lyxor UCITS
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Lyxor UCITS 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 Lyxor UCITS 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 Lyxor UCITS Daily, you can compare the effects of market volatilities on Petroleo Brasileiro and Lyxor UCITS 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 Lyxor UCITS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Lyxor UCITS.
Diversification Opportunities for Petroleo Brasileiro and Lyxor UCITS
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Petroleo and Lyxor is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Lyxor UCITS Daily in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor UCITS Daily 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 Lyxor UCITS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor UCITS Daily has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Lyxor UCITS go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Lyxor UCITS
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to generate 2.82 times more return on investment than Lyxor UCITS. However, Petroleo Brasileiro is 2.82 times more volatile than Lyxor UCITS Daily. It trades about -0.05 of its potential returns per unit of risk. Lyxor UCITS Daily is currently generating about -0.18 per unit of risk. If you would invest 1,391 in Petroleo Brasileiro Petrobras on September 17, 2024 and sell it today you would lose (30.00) from holding Petroleo Brasileiro Petrobras or give up 2.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. Lyxor UCITS Daily
Performance |
| Timeline |
| Petroleo Brasileiro |
| Lyxor UCITS Daily |
Petroleo Brasileiro and Lyxor UCITS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Lyxor UCITS
The main advantage of trading using opposite Petroleo Brasileiro and Lyxor UCITS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Lyxor UCITS 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 Lyxor UCITS will offset losses from the drop in Lyxor UCITS'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 |
| Lyxor UCITS vs. Lyxor UCITS Japan | Lyxor UCITS vs. Lyxor UCITS Japan | Lyxor UCITS vs. Lyxor UCITS Stoxx | Lyxor UCITS vs. Amundi CAC 40 |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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