Correlation Between Petroleo Brasileiro and Nike
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Nike 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 Nike 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 Nike Inc, you can compare the effects of market volatilities on Petroleo Brasileiro and Nike 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 Nike. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Nike.
Diversification Opportunities for Petroleo Brasileiro and Nike
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Petroleo and Nike is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Nike Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nike 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 Nike. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nike Inc has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Nike go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Nike
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to under-perform the Nike. In addition to that, Petroleo Brasileiro is 1.25 times more volatile than Nike Inc. It trades about -0.06 of its total potential returns per unit of risk. Nike Inc is currently generating about 0.19 per unit of volatility. If you would invest 7,013 in Nike Inc on September 19, 2024 and sell it today you would earn a total of 460.00 from holding Nike Inc or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. Nike Inc
Performance |
| Timeline |
| Petroleo Brasileiro |
| Nike Inc |
Petroleo Brasileiro and Nike Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Nike
The main advantage of trading using opposite Petroleo Brasileiro and Nike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Nike 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 Nike will offset losses from the drop in Nike'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 |
| Nike vs. Deckers Outdoor | Nike vs. Superior Plus Corp | Nike vs. NMI Holdings | Nike vs. SIVERS SEMICONDUCTORS AB |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |