Correlation Between Petroleo Brasileiro and Columbia Emerging
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Columbia Emerging 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 Columbia Emerging 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 Columbia Emerging Markets, you can compare the effects of market volatilities on Petroleo Brasileiro and Columbia Emerging 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 Columbia Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Columbia Emerging.
Diversification Opportunities for Petroleo Brasileiro and Columbia Emerging
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Petroleo and Columbia is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Columbia Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Emerging Markets 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 Columbia Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Emerging Markets has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Columbia Emerging go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Columbia Emerging
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to generate 2.7 times more return on investment than Columbia Emerging. However, Petroleo Brasileiro is 2.7 times more volatile than Columbia Emerging Markets. It trades about 0.1 of its potential returns per unit of risk. Columbia Emerging Markets is currently generating about 0.02 per unit of risk. If you would invest 1,372 in Petroleo Brasileiro Petrobras on September 13, 2024 and sell it today you would earn a total of 54.00 from holding Petroleo Brasileiro Petrobras or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. Columbia Emerging Markets
Performance |
| Timeline |
| Petroleo Brasileiro |
| Columbia Emerging Markets |
Petroleo Brasileiro and Columbia Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Columbia Emerging
The main advantage of trading using opposite Petroleo Brasileiro and Columbia Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Columbia Emerging 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 Columbia Emerging will offset losses from the drop in Columbia Emerging'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 |
| Columbia Emerging vs. SPDR SP Emerging | Columbia Emerging vs. WisdomTree Emerging Markets | Columbia Emerging vs. WisdomTree Emerging Markets | Columbia Emerging vs. SPDR SP Emerging |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |