Correlation Between Petroleo Brasileiro and BNY Mellon
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and BNY Mellon 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 BNY Mellon 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 BNY Mellon Global, you can compare the effects of market volatilities on Petroleo Brasileiro and BNY Mellon 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 BNY Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and BNY Mellon.
Diversification Opportunities for Petroleo Brasileiro and BNY Mellon
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Petroleo and BNY is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and BNY Mellon Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNY Mellon Global 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 BNY Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNY Mellon Global has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and BNY Mellon go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and BNY Mellon
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to under-perform the BNY Mellon. In addition to that, Petroleo Brasileiro is 3.82 times more volatile than BNY Mellon Global. It trades about -0.02 of its total potential returns per unit of risk. BNY Mellon Global is currently generating about 0.15 per unit of volatility. If you would invest 163.00 in BNY Mellon Global on September 13, 2024 and sell it today you would earn a total of 4.00 from holding BNY Mellon Global or generate 2.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. BNY Mellon Global
Performance |
| Timeline |
| Petroleo Brasileiro |
| BNY Mellon Global |
Petroleo Brasileiro and BNY Mellon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and BNY Mellon
The main advantage of trading using opposite Petroleo Brasileiro and BNY Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, BNY Mellon 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 BNY Mellon will offset losses from the drop in BNY Mellon's long position.| Petroleo Brasileiro vs. Aquagold International | Petroleo Brasileiro vs. Thrivent High Yield | Petroleo Brasileiro vs. Morningstar Unconstrained Allocation | Petroleo Brasileiro vs. Via Renewables |
| BNY Mellon vs. Groupama Entreprises N | BNY Mellon vs. Renaissance Europe C | BNY Mellon vs. Superior Plus Corp | BNY Mellon vs. Origin Agritech |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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