Correlation Between Petroleo Brasileiro and FinTech Evolution
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and FinTech Evolution 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 FinTech Evolution 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 FinTech Evolution Acquisition, you can compare the effects of market volatilities on Petroleo Brasileiro and FinTech Evolution 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 FinTech Evolution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and FinTech Evolution.
Diversification Opportunities for Petroleo Brasileiro and FinTech Evolution
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Petroleo and FinTech is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and FinTech Evolution Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FinTech Evolution 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 FinTech Evolution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FinTech Evolution has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and FinTech Evolution go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and FinTech Evolution
If you would invest 1,362 in Petroleo Brasileiro Petrobras on September 12, 2024 and sell it today you would earn a total of 98.00 from holding Petroleo Brasileiro Petrobras or generate 7.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.4% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. FinTech Evolution Acquisition
Performance |
| Timeline |
| Petroleo Brasileiro |
| FinTech Evolution |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Petroleo Brasileiro and FinTech Evolution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and FinTech Evolution
The main advantage of trading using opposite Petroleo Brasileiro and FinTech Evolution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, FinTech Evolution 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 FinTech Evolution will offset losses from the drop in FinTech Evolution'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 |
| FinTech Evolution vs. Zijin Mining Group | FinTech Evolution vs. National CineMedia | FinTech Evolution vs. Skechers USA | FinTech Evolution vs. Eastern Co |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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