Correlation Between Petroleo Brasileiro and Nisshinbo Holdings
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Nisshinbo 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 Nisshinbo 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 Nisshinbo Holdings, you can compare the effects of market volatilities on Petroleo Brasileiro and Nisshinbo 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 Nisshinbo Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Nisshinbo Holdings.
Diversification Opportunities for Petroleo Brasileiro and Nisshinbo Holdings
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Petroleo and Nisshinbo is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Nisshinbo Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nisshinbo 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 Nisshinbo Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nisshinbo Holdings has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Nisshinbo Holdings go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Nisshinbo Holdings
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to generate 1.4 times more return on investment than Nisshinbo Holdings. However, Petroleo Brasileiro is 1.4 times more volatile than Nisshinbo Holdings. It trades about 0.07 of its potential returns per unit of risk. Nisshinbo Holdings is currently generating about -0.03 per unit of risk. If you would invest 763.00 in Petroleo Brasileiro Petrobras on September 19, 2024 and sell it today you would earn a total of 589.00 from holding Petroleo Brasileiro Petrobras or generate 77.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.14% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. Nisshinbo Holdings
Performance |
| Timeline |
| Petroleo Brasileiro |
| Nisshinbo Holdings |
Petroleo Brasileiro and Nisshinbo Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Nisshinbo Holdings
The main advantage of trading using opposite Petroleo Brasileiro and Nisshinbo Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Nisshinbo 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 Nisshinbo Holdings will offset losses from the drop in Nisshinbo 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 |
| Nisshinbo Holdings vs. Nordic Semiconductor ASA | Nisshinbo Holdings vs. KRISPY KREME DL 01 | Nisshinbo Holdings vs. Cogent Communications Holdings | Nisshinbo Holdings vs. Chesapeake Utilities |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |