Correlation Between Petroleo Brasileiro and Petróleo Brasileiro
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Petróleo Brasileiro 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 Petróleo Brasileiro 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 Petrleo Brasileiro SA, you can compare the effects of market volatilities on Petroleo Brasileiro and Petróleo Brasileiro 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 Petróleo Brasileiro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Petróleo Brasileiro.
Diversification Opportunities for Petroleo Brasileiro and Petróleo Brasileiro
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Petroleo and Petróleo is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Petrleo Brasileiro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petróleo Brasileiro 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 Petróleo Brasileiro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petróleo Brasileiro has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Petróleo Brasileiro go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Petróleo Brasileiro
Considering the 90-day investment horizon Petroleo Brasileiro is expected to generate 1.17 times less return on investment than Petróleo Brasileiro. But when comparing it to its historical volatility, Petroleo Brasileiro Petrobras is 1.01 times less risky than Petróleo Brasileiro. It trades about 0.15 of its potential returns per unit of risk. Petrleo Brasileiro SA is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,249 in Petrleo Brasileiro SA on August 24, 2024 and sell it today you would earn a total of 54.00 from holding Petrleo Brasileiro SA or generate 4.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. Petrleo Brasileiro SA
Performance |
| Timeline |
| Petroleo Brasileiro |
| Petróleo Brasileiro |
Petroleo Brasileiro and Petróleo Brasileiro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Petróleo Brasileiro
The main advantage of trading using opposite Petroleo Brasileiro and Petróleo Brasileiro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Petróleo Brasileiro 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 Petróleo Brasileiro will offset losses from the drop in Petróleo Brasileiro's long position.| Petroleo Brasileiro vs. Eshallgo Class A | Petroleo Brasileiro vs. Amtech Systems | Petroleo Brasileiro vs. Gold Fields Ltd | Petroleo Brasileiro vs. Aegean Airlines SA |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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