Correlation Between Petroleo Brasileiro and Comstock Holding
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Comstock Holding 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 Comstock Holding 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 Comstock Holding Companies, you can compare the effects of market volatilities on Petroleo Brasileiro and Comstock Holding 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 Comstock Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Comstock Holding.
Diversification Opportunities for Petroleo Brasileiro and Comstock Holding
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Petroleo and Comstock is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Comstock Holding Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comstock Holding Com 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 Comstock Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comstock Holding Com has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Comstock Holding go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Comstock Holding
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to under-perform the Comstock Holding. But the stock apears to be less risky and, when comparing its historical volatility, Petroleo Brasileiro Petrobras is 2.36 times less risky than Comstock Holding. The stock trades about 0.0 of its potential returns per unit of risk. The Comstock Holding Companies is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 580.00 in Comstock Holding Companies on September 19, 2024 and sell it today you would earn a total of 155.00 from holding Comstock Holding Companies or generate 26.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. Comstock Holding Companies
Performance |
| Timeline |
| Petroleo Brasileiro |
| Comstock Holding Com |
Petroleo Brasileiro and Comstock Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Comstock Holding
The main advantage of trading using opposite Petroleo Brasileiro and Comstock Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Comstock Holding 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 Comstock Holding will offset losses from the drop in Comstock Holding'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 |
| Comstock Holding vs. GRUPO CARSO A1 | Comstock Holding vs. Elmos Semiconductor SE | Comstock Holding vs. Carsales | Comstock Holding vs. 24SEVENOFFICE 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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