Correlation Between Petroleo Brasileiro and Stabilis Solutions
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Stabilis Solutions 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 Stabilis Solutions 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 Stabilis Solutions, you can compare the effects of market volatilities on Petroleo Brasileiro and Stabilis Solutions 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 Stabilis Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Stabilis Solutions.
Diversification Opportunities for Petroleo Brasileiro and Stabilis Solutions
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Petroleo and Stabilis is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Stabilis Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stabilis Solutions 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 Stabilis Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stabilis Solutions has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Stabilis Solutions go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Stabilis Solutions
Considering the 90-day investment horizon Petroleo Brasileiro is expected to generate 2.48 times less return on investment than Stabilis Solutions. But when comparing it to its historical volatility, Petroleo Brasileiro Petrobras is 2.58 times less risky than Stabilis Solutions. It trades about 0.19 of its potential returns per unit of risk. Stabilis Solutions is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 436.00 in Stabilis Solutions on August 31, 2024 and sell it today you would earn a total of 69.00 from holding Stabilis Solutions or generate 15.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. Stabilis Solutions
Performance |
| Timeline |
| Petroleo Brasileiro |
| Stabilis Solutions |
Petroleo Brasileiro and Stabilis Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Stabilis Solutions
The main advantage of trading using opposite Petroleo Brasileiro and Stabilis Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Stabilis Solutions 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 Stabilis Solutions will offset losses from the drop in Stabilis Solutions' 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 |
| Stabilis Solutions vs. Equinor ASA ADR | Stabilis Solutions vs. TotalEnergies SE ADR | Stabilis Solutions vs. Ecopetrol SA ADR | Stabilis Solutions vs. National Fuel Gas |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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