Correlation Between Petroleo Brasileiro and Dotdigital Group
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Dotdigital Group 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 Dotdigital Group 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 dotdigital Group Plc, you can compare the effects of market volatilities on Petroleo Brasileiro and Dotdigital Group 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 Dotdigital Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Dotdigital Group.
Diversification Opportunities for Petroleo Brasileiro and Dotdigital Group
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Petroleo and Dotdigital is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and dotdigital Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on dotdigital Group Plc 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 Dotdigital Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of dotdigital Group Plc has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Dotdigital Group go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Dotdigital Group
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to generate 10.0 times more return on investment than Dotdigital Group. However, Petroleo Brasileiro is 10.0 times more volatile than dotdigital Group Plc. It trades about 0.04 of its potential returns per unit of risk. dotdigital Group Plc is currently generating about 0.22 per unit of risk. If you would invest 1,287 in Petroleo Brasileiro Petrobras on October 7, 2024 and sell it today you would earn a total of 15.00 from holding Petroleo Brasileiro Petrobras or generate 1.17% 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. dotdigital Group Plc
Performance |
| Timeline |
| Petroleo Brasileiro |
| dotdigital Group Plc |
Petroleo Brasileiro and Dotdigital Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Dotdigital Group
The main advantage of trading using opposite Petroleo Brasileiro and Dotdigital Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Dotdigital Group 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 Dotdigital Group will offset losses from the drop in Dotdigital Group's long position.| Petroleo Brasileiro vs. Exxon Mobil Corp | Petroleo Brasileiro vs. Aquagold International | Petroleo Brasileiro vs. Alibaba Group Holding | Petroleo Brasileiro vs. Banco Bradesco SA |
| Dotdigital Group vs. TrackX Holdings | Dotdigital Group vs. Generative AI Solutions | Dotdigital Group vs. eGain | Dotdigital Group vs. Marin Software |
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 CEOs Directory module to screen CEOs from public companies around the world.
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