Correlation Between Petroleo Brasileiro and Federated Global
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Federated Global 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 Federated Global 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 Federated Global Allocation, you can compare the effects of market volatilities on Petroleo Brasileiro and Federated Global 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 Federated Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Federated Global.
Diversification Opportunities for Petroleo Brasileiro and Federated Global
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Petroleo and Federated is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Federated Global Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Global All 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 Federated Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Global All has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Federated Global go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Federated Global
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to generate 5.79 times more return on investment than Federated Global. However, Petroleo Brasileiro is 5.79 times more volatile than Federated Global Allocation. It trades about 0.09 of its potential returns per unit of risk. Federated Global Allocation is currently generating about 0.22 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 48.00 from holding Petroleo Brasileiro Petrobras or generate 3.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. Federated Global Allocation
Performance |
| Timeline |
| Petroleo Brasileiro |
| Federated Global All |
Petroleo Brasileiro and Federated Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Federated Global
The main advantage of trading using opposite Petroleo Brasileiro and Federated Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Federated Global 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 Federated Global will offset losses from the drop in Federated Global'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 |
| Federated Global vs. Federated Hermes Mdt | Federated Global vs. Federated Mdt Large | Federated Global vs. Federated High Income | Federated Global vs. Federated Hermes Sdg |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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