Correlation Between Petroleo Brasileiro and Global Warming
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Global Warming 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 Global Warming 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 Global Warming Solut, you can compare the effects of market volatilities on Petroleo Brasileiro and Global Warming 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 Global Warming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Global Warming.
Diversification Opportunities for Petroleo Brasileiro and Global Warming
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Petroleo and Global is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Global Warming Solut in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Warming Solut 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 Global Warming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Warming Solut has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Global Warming go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Global Warming
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to generate 0.18 times more return on investment than Global Warming. However, Petroleo Brasileiro Petrobras is 5.56 times less risky than Global Warming. It trades about -0.13 of its potential returns per unit of risk. Global Warming Solut is currently generating about -0.08 per unit of risk. If you would invest 1,368 in Petroleo Brasileiro Petrobras on September 20, 2024 and sell it today you would lose (84.00) from holding Petroleo Brasileiro Petrobras or give up 6.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. Global Warming Solut
Performance |
| Timeline |
| Petroleo Brasileiro |
| Global Warming Solut |
Petroleo Brasileiro and Global Warming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Global Warming
The main advantage of trading using opposite Petroleo Brasileiro and Global Warming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Global Warming 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 Global Warming will offset losses from the drop in Global Warming'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 |
| Global Warming vs. Darkpulse | Global Warming vs. Cepton Inc | Global Warming vs. Blacksky Technology | Global Warming vs. Coherent |
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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