Correlation Between Petroleo Brasileiro and Rmy Cointreau
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Rmy Cointreau 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 Rmy Cointreau 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 Rmy Cointreau SA, you can compare the effects of market volatilities on Petroleo Brasileiro and Rmy Cointreau 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 Rmy Cointreau. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Rmy Cointreau.
Diversification Opportunities for Petroleo Brasileiro and Rmy Cointreau
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Petroleo and Rmy is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Rmy Cointreau SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rmy Cointreau SA 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 Rmy Cointreau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rmy Cointreau SA has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Rmy Cointreau go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Rmy Cointreau
Considering the 90-day investment horizon Petroleo Brasileiro is expected to generate 1.93 times less return on investment than Rmy Cointreau. But when comparing it to its historical volatility, Petroleo Brasileiro Petrobras is 1.25 times less risky than Rmy Cointreau. It trades about 0.17 of its potential returns per unit of risk. Rmy Cointreau SA is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 5,869 in Rmy Cointreau SA on September 13, 2024 and sell it today you would earn a total of 793.00 from holding Rmy Cointreau SA or generate 13.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. Rmy Cointreau SA
Performance |
| Timeline |
| Petroleo Brasileiro |
| Rmy Cointreau SA |
Petroleo Brasileiro and Rmy Cointreau Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Rmy Cointreau
The main advantage of trading using opposite Petroleo Brasileiro and Rmy Cointreau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Rmy Cointreau 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 Rmy Cointreau will offset losses from the drop in Rmy Cointreau's long position.| Petroleo Brasileiro vs. Aquagold International | Petroleo Brasileiro vs. Thrivent High Yield | Petroleo Brasileiro vs. Morningstar Unconstrained Allocation | Petroleo Brasileiro vs. Via Renewables |
| Rmy Cointreau vs. Remy Cointreau SA | Rmy Cointreau vs. Pernod Ricard SA | Rmy Cointreau vs. Carlsberg AS | Rmy Cointreau vs. Heineken Holding NV |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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