Correlation Between Petroleo Brasileiro and Grupo Supervielle

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Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Grupo Supervielle 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 Grupo Supervielle 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 Grupo Supervielle SA, you can compare the effects of market volatilities on Petroleo Brasileiro and Grupo Supervielle 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 Grupo Supervielle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Grupo Supervielle.

Diversification Opportunities for Petroleo Brasileiro and Grupo Supervielle

-0.39
  Correlation Coefficient

Very good diversification

The 3 months correlation between Petroleo and Grupo is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Grupo Supervielle SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Supervielle 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 Grupo Supervielle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Supervielle has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Grupo Supervielle go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and Grupo Supervielle

Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to under-perform the Grupo Supervielle. But the stock apears to be less risky and, when comparing its historical volatility, Petroleo Brasileiro Petrobras is 2.66 times less risky than Grupo Supervielle. The stock trades about -0.24 of its potential returns per unit of risk. The Grupo Supervielle SA is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest  242,000  in Grupo Supervielle SA on September 26, 2024 and sell it today you would earn a total of  128,000  from holding Grupo Supervielle SA or generate 52.89% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

Petroleo Brasileiro Petrobras  vs.  Grupo Supervielle SA

 Performance 
       Timeline  
Petroleo Brasileiro 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Petroleo Brasileiro Petrobras has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest conflicting performance, the Stock's fundamental drivers remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.
Grupo Supervielle 

Risk-Adjusted Performance

26 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Supervielle SA are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Grupo Supervielle sustained solid returns over the last few months and may actually be approaching a breakup point.

Petroleo Brasileiro and Grupo Supervielle Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Petroleo Brasileiro and Grupo Supervielle

The main advantage of trading using opposite Petroleo Brasileiro and Grupo Supervielle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Grupo Supervielle 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 Grupo Supervielle will offset losses from the drop in Grupo Supervielle's long position.
The idea behind Petroleo Brasileiro Petrobras and Grupo Supervielle SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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