Correlation Between Petroleo Brasileiro and Pakistan Engineering
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Pakistan Engineering 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 Pakistan Engineering 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 Pakistan Engineering, you can compare the effects of market volatilities on Petroleo Brasileiro and Pakistan Engineering 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 Pakistan Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Pakistan Engineering.
Diversification Opportunities for Petroleo Brasileiro and Pakistan Engineering
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Petroleo and Pakistan is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Pakistan Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pakistan Engineering 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 Pakistan Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pakistan Engineering has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Pakistan Engineering go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Pakistan Engineering
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to generate 0.76 times more return on investment than Pakistan Engineering. However, Petroleo Brasileiro Petrobras is 1.32 times less risky than Pakistan Engineering. It trades about 0.04 of its potential returns per unit of risk. Pakistan Engineering is currently generating about 0.01 per unit of risk. If you would invest 1,287 in Petroleo Brasileiro Petrobras on October 7, 2024 and sell it today you would earn a total of 15.00 from holding Petroleo Brasileiro Petrobras or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. Pakistan Engineering
Performance |
| Timeline |
| Petroleo Brasileiro |
| Pakistan Engineering |
Petroleo Brasileiro and Pakistan Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Pakistan Engineering
The main advantage of trading using opposite Petroleo Brasileiro and Pakistan Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Pakistan Engineering 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 Pakistan Engineering will offset losses from the drop in Pakistan Engineering's long position.| Petroleo Brasileiro vs. Exxon Mobil Corp | Petroleo Brasileiro vs. Aquagold International | Petroleo Brasileiro vs. Alibaba Group Holding | Petroleo Brasileiro vs. Banco Bradesco SA |
| Pakistan Engineering vs. EFU General Insurance | Pakistan Engineering vs. United Insurance | Pakistan Engineering vs. Fateh Sports Wear | Pakistan Engineering vs. Air Link Communication |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |