Correlation Between Petroleo Brasileiro and Nava Nakorn
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Nava Nakorn 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 Nava Nakorn 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 Nava Nakorn Public, you can compare the effects of market volatilities on Petroleo Brasileiro and Nava Nakorn 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 Nava Nakorn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Nava Nakorn.
Diversification Opportunities for Petroleo Brasileiro and Nava Nakorn
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Petroleo and Nava is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Nava Nakorn Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nava Nakorn Public 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 Nava Nakorn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nava Nakorn Public has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Nava Nakorn go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Nava Nakorn
Considering the 90-day investment horizon Petroleo Brasileiro is expected to generate 64.05 times less return on investment than Nava Nakorn. But when comparing it to its historical volatility, Petroleo Brasileiro Petrobras is 37.69 times less risky than Nava Nakorn. It trades about 0.03 of its potential returns per unit of risk. Nava Nakorn Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 179.00 in Nava Nakorn Public on December 4, 2024 and sell it today you would lose (20.00) from holding Nava Nakorn Public or give up 11.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.14% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. Nava Nakorn Public
Performance |
| Timeline |
| Petroleo Brasileiro |
| Nava Nakorn Public |
Petroleo Brasileiro and Nava Nakorn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Nava Nakorn
The main advantage of trading using opposite Petroleo Brasileiro and Nava Nakorn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Nava Nakorn 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 Nava Nakorn will offset losses from the drop in Nava Nakorn'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 |
| Nava Nakorn vs. NC Housing Public | Nava Nakorn vs. LPN Development Public | Nava Nakorn vs. Property Perfect Public | Nava Nakorn vs. Lalin Property Public |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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