Correlation Between Petroleo Brasileiro and Carnegie Clean
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Carnegie Clean 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 Carnegie Clean 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 Carnegie Clean Energy, you can compare the effects of market volatilities on Petroleo Brasileiro and Carnegie Clean 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 Carnegie Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Carnegie Clean.
Diversification Opportunities for Petroleo Brasileiro and Carnegie Clean
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Petroleo and Carnegie is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Carnegie Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnegie Clean Energy 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 Carnegie Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnegie Clean Energy has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Carnegie Clean go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Carnegie Clean
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to generate 0.42 times more return on investment than Carnegie Clean. However, Petroleo Brasileiro Petrobras is 2.39 times less risky than Carnegie Clean. It trades about 0.01 of its potential returns per unit of risk. Carnegie Clean Energy is currently generating about -0.03 per unit of risk. If you would invest 1,387 in Petroleo Brasileiro Petrobras on September 14, 2024 and sell it today you would lose (26.00) from holding Petroleo Brasileiro Petrobras or give up 1.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.81% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. Carnegie Clean Energy
Performance |
| Timeline |
| Petroleo Brasileiro |
| Carnegie Clean Energy |
Petroleo Brasileiro and Carnegie Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Carnegie Clean
The main advantage of trading using opposite Petroleo Brasileiro and Carnegie Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Carnegie Clean 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 Carnegie Clean will offset losses from the drop in Carnegie Clean'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 |
| Carnegie Clean vs. Superior Plus Corp | Carnegie Clean vs. SIVERS SEMICONDUCTORS AB | Carnegie Clean vs. Norsk Hydro ASA | Carnegie Clean vs. Reliance Steel Aluminum |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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