Correlation Between Petroleo Brasileiro and Qingling Motors
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Qingling Motors 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 Qingling Motors 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 Qingling Motors Co, you can compare the effects of market volatilities on Petroleo Brasileiro and Qingling Motors 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 Qingling Motors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Qingling Motors.
Diversification Opportunities for Petroleo Brasileiro and Qingling Motors
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Petroleo and Qingling is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Qingling Motors Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qingling Motors 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 Qingling Motors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qingling Motors has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Qingling Motors go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Qingling Motors
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to generate 0.96 times more return on investment than Qingling Motors. However, Petroleo Brasileiro Petrobras is 1.04 times less risky than Qingling Motors. It trades about -0.02 of its potential returns per unit of risk. Qingling Motors Co is currently generating about -0.09 per unit of risk. If you would invest 1,317 in Petroleo Brasileiro Petrobras on October 8, 2024 and sell it today you would lose (15.00) from holding Petroleo Brasileiro Petrobras or give up 1.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 84.21% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. Qingling Motors Co
Performance |
| Timeline |
| Petroleo Brasileiro |
| Qingling Motors |
Petroleo Brasileiro and Qingling Motors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Qingling Motors
The main advantage of trading using opposite Petroleo Brasileiro and Qingling Motors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Qingling Motors 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 Qingling Motors will offset losses from the drop in Qingling Motors' 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 |
| Qingling Motors vs. Sunstone Hotel Investors | Qingling Motors vs. AGRICULTBK HADR25 YC | Qingling Motors vs. Federal Agricultural Mortgage | Qingling Motors vs. Chongqing Machinery Electric |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |