Correlation Between Petroleo Brasileiro and Stelmine Canada
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Stelmine Canada 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 Stelmine Canada 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 Stelmine Canada, you can compare the effects of market volatilities on Petroleo Brasileiro and Stelmine Canada 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 Stelmine Canada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Stelmine Canada.
Diversification Opportunities for Petroleo Brasileiro and Stelmine Canada
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Petroleo and Stelmine is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Stelmine Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stelmine Canada 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 Stelmine Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stelmine Canada has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Stelmine Canada go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Stelmine Canada
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to generate 0.22 times more return on investment than Stelmine Canada. However, Petroleo Brasileiro Petrobras is 4.54 times less risky than Stelmine Canada. It trades about 0.07 of its potential returns per unit of risk. Stelmine Canada is currently generating about -0.01 per unit of risk. If you would invest 738.00 in Petroleo Brasileiro Petrobras on October 7, 2024 and sell it today you would earn a total of 564.00 from holding Petroleo Brasileiro Petrobras or generate 76.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. Stelmine Canada
Performance |
| Timeline |
| Petroleo Brasileiro |
| Stelmine Canada |
Petroleo Brasileiro and Stelmine Canada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Stelmine Canada
The main advantage of trading using opposite Petroleo Brasileiro and Stelmine Canada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Stelmine Canada 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 Stelmine Canada will offset losses from the drop in Stelmine Canada'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 |
| Stelmine Canada vs. Galantas Gold Corp | Stelmine Canada vs. CANEX Metals | Stelmine Canada vs. Themac Resources Group | Stelmine Canada vs. Magna Terra Minerals |
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 CEOs Directory module to screen CEOs from public companies around the world.
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