Correlation Between Petroleo Brasileiro and Prism Johnson
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By analyzing existing cross correlation between Petroleo Brasileiro Petrobras and Prism Johnson Limited, you can compare the effects of market volatilities on Petroleo Brasileiro and Prism Johnson 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 Prism Johnson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Prism Johnson.
Diversification Opportunities for Petroleo Brasileiro and Prism Johnson
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Petroleo and Prism is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Prism Johnson Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prism Johnson Limited 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 Prism Johnson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prism Johnson Limited has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Prism Johnson go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Prism Johnson
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to generate 0.62 times more return on investment than Prism Johnson. However, Petroleo Brasileiro Petrobras is 1.61 times less risky than Prism Johnson. It trades about 0.03 of its potential returns per unit of risk. Prism Johnson Limited is currently generating about -0.05 per unit of risk. If you would invest 1,200 in Petroleo Brasileiro Petrobras on December 4, 2024 and sell it today you would earn a total of 135.00 from holding Petroleo Brasileiro Petrobras or generate 11.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.18% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. Prism Johnson Limited
Performance |
| Timeline |
| Petroleo Brasileiro |
| Prism Johnson Limited |
Petroleo Brasileiro and Prism Johnson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Prism Johnson
The main advantage of trading using opposite Petroleo Brasileiro and Prism Johnson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Prism Johnson 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 Prism Johnson will offset losses from the drop in Prism Johnson'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 |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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