Correlation Between Petroleo Brasileiro and H1ES34
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and H1ES34 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 H1ES34 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 H1ES34, you can compare the effects of market volatilities on Petroleo Brasileiro and H1ES34 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 H1ES34. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and H1ES34.
Diversification Opportunities for Petroleo Brasileiro and H1ES34
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Petroleo and H1ES34 is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and H1ES34 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H1ES34 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 H1ES34. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H1ES34 has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and H1ES34 go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and H1ES34
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to under-perform the H1ES34. In addition to that, Petroleo Brasileiro is 29.7 times more volatile than H1ES34. It trades about -0.19 of its total potential returns per unit of risk. H1ES34 is currently generating about 0.22 per unit of volatility. If you would invest 37,818 in H1ES34 on September 27, 2024 and sell it today you would earn a total of 106.00 from holding H1ES34 or generate 0.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. H1ES34
Performance |
| Timeline |
| Petroleo Brasileiro |
| H1ES34 |
Petroleo Brasileiro and H1ES34 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and H1ES34
The main advantage of trading using opposite Petroleo Brasileiro and H1ES34 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, H1ES34 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 H1ES34 will offset losses from the drop in H1ES34'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 |
| H1ES34 vs. ConocoPhillips | H1ES34 vs. EOG Resources | H1ES34 vs. Occidental Petroleum | H1ES34 vs. Devon Energy |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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