Correlation Between Petroleo Brasileiro and Catella AB
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Catella AB 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 Catella AB 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 Catella AB A, you can compare the effects of market volatilities on Petroleo Brasileiro and Catella AB 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 Catella AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Catella AB.
Diversification Opportunities for Petroleo Brasileiro and Catella AB
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Petroleo and Catella is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Catella AB A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catella AB A 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 Catella AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catella AB A has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Catella AB go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Catella AB
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to generate 0.68 times more return on investment than Catella AB. However, Petroleo Brasileiro Petrobras is 1.48 times less risky than Catella AB. It trades about 0.09 of its potential returns per unit of risk. Catella AB A is currently generating about -0.11 per unit of risk. If you would invest 1,381 in Petroleo Brasileiro Petrobras on September 14, 2024 and sell it today you would earn a total of 45.00 from holding Petroleo Brasileiro Petrobras or generate 3.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. Catella AB A
Performance |
| Timeline |
| Petroleo Brasileiro |
| Catella AB A |
Petroleo Brasileiro and Catella AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Catella AB
The main advantage of trading using opposite Petroleo Brasileiro and Catella AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Catella AB 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 Catella AB will offset losses from the drop in Catella AB'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 |
| Catella AB vs. Catella AB | Catella AB vs. Svolder AB | Catella AB vs. Beijer Alma AB | Catella AB vs. BTS Group AB |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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