Correlation Between Petroleo Brasileiro and Mfs New
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Mfs New 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 Mfs New 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 Mfs New Discovery, you can compare the effects of market volatilities on Petroleo Brasileiro and Mfs New 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 Mfs New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Mfs New.
Diversification Opportunities for Petroleo Brasileiro and Mfs New
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Petroleo and Mfs is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Mfs New Discovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs New Discovery 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 Mfs New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs New Discovery has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Mfs New go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Mfs New
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to generate 1.79 times more return on investment than Mfs New. However, Petroleo Brasileiro is 1.79 times more volatile than Mfs New Discovery. It trades about 0.05 of its potential returns per unit of risk. Mfs New Discovery is currently generating about 0.04 per unit of risk. If you would invest 1,125 in Petroleo Brasileiro Petrobras on September 12, 2024 and sell it today you would earn a total of 308.00 from holding Petroleo Brasileiro Petrobras or generate 27.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. Mfs New Discovery
Performance |
| Timeline |
| Petroleo Brasileiro |
| Mfs New Discovery |
Petroleo Brasileiro and Mfs New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Mfs New
The main advantage of trading using opposite Petroleo Brasileiro and Mfs New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Mfs New 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 Mfs New will offset losses from the drop in Mfs New'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 |
| Mfs New vs. Federated Hermes Inflation | Mfs New vs. Guggenheim Managed Futures | Mfs New vs. Simt Multi Asset Inflation | Mfs New vs. American Funds Inflation |
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 Stocks Directory module to find actively traded stocks across global markets.
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