Correlation Between Petroleo Brasileiro and IShares V
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and IShares V 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 IShares V 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 iShares V PLC, you can compare the effects of market volatilities on Petroleo Brasileiro and IShares V 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 IShares V. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and IShares V.
Diversification Opportunities for Petroleo Brasileiro and IShares V
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Petroleo and IShares is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and iShares V PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares V PLC 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 IShares V. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares V PLC has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and IShares V go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and IShares V
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to under-perform the IShares V. In addition to that, Petroleo Brasileiro is 18.02 times more volatile than iShares V PLC. It trades about -0.16 of its total potential returns per unit of risk. iShares V PLC is currently generating about 0.21 per unit of volatility. If you would invest 514.00 in iShares V PLC on September 19, 2024 and sell it today you would earn a total of 3.00 from holding iShares V PLC or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. iShares V PLC
Performance |
| Timeline |
| Petroleo Brasileiro |
| iShares V PLC |
Petroleo Brasileiro and IShares V Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and IShares V
The main advantage of trading using opposite Petroleo Brasileiro and IShares V positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, IShares V 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 IShares V will offset losses from the drop in IShares V'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 |
| IShares V vs. Lyxor UCITS Japan | IShares V vs. Lyxor UCITS Japan | IShares V vs. Lyxor UCITS Stoxx | IShares V vs. Amundi CAC 40 |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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