Correlation Between Petroleo Brasileiro and MCBC Holdings
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and MCBC Holdings 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 MCBC Holdings 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 MCBC Holdings, you can compare the effects of market volatilities on Petroleo Brasileiro and MCBC Holdings 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 MCBC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and MCBC Holdings.
Diversification Opportunities for Petroleo Brasileiro and MCBC Holdings
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Petroleo and MCBC is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and MCBC Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCBC Holdings 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 MCBC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCBC Holdings has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and MCBC Holdings go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and MCBC Holdings
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to generate 1.17 times more return on investment than MCBC Holdings. However, Petroleo Brasileiro is 1.17 times more volatile than MCBC Holdings. It trades about -0.06 of its potential returns per unit of risk. MCBC Holdings is currently generating about -0.11 per unit of risk. If you would invest 1,391 in Petroleo Brasileiro Petrobras on September 18, 2024 and sell it today you would lose (39.00) from holding Petroleo Brasileiro Petrobras or give up 2.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. MCBC Holdings
Performance |
| Timeline |
| Petroleo Brasileiro |
| MCBC Holdings |
Petroleo Brasileiro and MCBC Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and MCBC Holdings
The main advantage of trading using opposite Petroleo Brasileiro and MCBC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, MCBC Holdings 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 MCBC Holdings will offset losses from the drop in MCBC Holdings' 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 |
| MCBC Holdings vs. Malibu Boats | MCBC Holdings vs. Onewater Marine | MCBC Holdings vs. Heidrick Struggles International | MCBC Holdings vs. Johnson Outdoors |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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