Correlation Between Petroleo Brasileiro and Imaging Dynamics

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Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Imaging Dynamics 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 Imaging Dynamics 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 Imaging Dynamics, you can compare the effects of market volatilities on Petroleo Brasileiro and Imaging Dynamics 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 Imaging Dynamics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Imaging Dynamics.

Diversification Opportunities for Petroleo Brasileiro and Imaging Dynamics

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Petroleo and Imaging is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Imaging Dynamics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imaging Dynamics 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 Imaging Dynamics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imaging Dynamics has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Imaging Dynamics go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and Imaging Dynamics

If you would invest  1,372  in Petroleo Brasileiro Petrobras on September 13, 2024 and sell it today you would earn a total of  48.00  from holding Petroleo Brasileiro Petrobras or generate 3.5% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy4.55%
ValuesDaily Returns

Petroleo Brasileiro Petrobras  vs.  Imaging Dynamics

 Performance 
       Timeline  
Petroleo Brasileiro 

Risk-Adjusted Performance

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Over the last 90 days Petroleo Brasileiro Petrobras has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, Petroleo Brasileiro is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.
Imaging Dynamics 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Imaging Dynamics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Imaging Dynamics is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Petroleo Brasileiro and Imaging Dynamics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Petroleo Brasileiro and Imaging Dynamics

The main advantage of trading using opposite Petroleo Brasileiro and Imaging Dynamics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Imaging Dynamics 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 Imaging Dynamics will offset losses from the drop in Imaging Dynamics' long position.
The idea behind Petroleo Brasileiro Petrobras and Imaging Dynamics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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