Correlation Between Petroleo Brasileiro and Granite GAFAM
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Granite GAFAM 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 Granite GAFAM 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 Granite GAFAM, you can compare the effects of market volatilities on Petroleo Brasileiro and Granite GAFAM 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 Granite GAFAM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Granite GAFAM.
Diversification Opportunities for Petroleo Brasileiro and Granite GAFAM
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Petroleo and Granite is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Granite GAFAM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite GAFAM 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 Granite GAFAM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite GAFAM has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Granite GAFAM go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Granite GAFAM
If you would invest 1,264 in Petroleo Brasileiro Petrobras on September 21, 2024 and sell it today you would earn a total of 40.00 from holding Petroleo Brasileiro Petrobras or generate 3.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. Granite GAFAM
Performance |
| Timeline |
| Petroleo Brasileiro |
| Granite GAFAM |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Petroleo Brasileiro and Granite GAFAM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Granite GAFAM
The main advantage of trading using opposite Petroleo Brasileiro and Granite GAFAM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Granite GAFAM 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 Granite GAFAM will offset losses from the drop in Granite GAFAM'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 |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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