Correlation Between Petroleo Brasileiro and KLX
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and KLX 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 KLX 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 KLX Inc, you can compare the effects of market volatilities on Petroleo Brasileiro and KLX 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 KLX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and KLX.
Diversification Opportunities for Petroleo Brasileiro and KLX
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Petroleo and KLX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and KLX Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KLX Inc 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 KLX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KLX Inc has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and KLX go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and KLX
If you would invest 1,387 in Petroleo Brasileiro Petrobras on September 14, 2024 and sell it today you would lose (26.00) from holding Petroleo Brasileiro Petrobras or give up 1.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. KLX Inc
Performance |
| Timeline |
| Petroleo Brasileiro |
| KLX Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Petroleo Brasileiro and KLX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and KLX
The main advantage of trading using opposite Petroleo Brasileiro and KLX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, KLX 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 KLX will offset losses from the drop in KLX'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 |
| KLX vs. Bassett Furniture Industries | KLX vs. Haverty Furniture Companies | KLX vs. Boston Properties | KLX vs. Ambev SA ADR |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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