Correlation Between Petroleo Brasileiro and Total Produce
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Total Produce 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 Total Produce 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 Total Produce Plc, you can compare the effects of market volatilities on Petroleo Brasileiro and Total Produce 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 Total Produce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Total Produce.
Diversification Opportunities for Petroleo Brasileiro and Total Produce
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Petroleo and Total is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Total Produce Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total Produce Plc 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 Total Produce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Produce Plc has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Total Produce go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Total Produce
If you would invest (100.00) in Total Produce Plc on September 20, 2024 and sell it today you would earn a total of 100.00 from holding Total Produce Plc or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. Total Produce Plc
Performance |
| Timeline |
| Petroleo Brasileiro |
| Total Produce Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Petroleo Brasileiro and Total Produce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Total Produce
The main advantage of trading using opposite Petroleo Brasileiro and Total Produce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Total Produce 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 Total Produce will offset losses from the drop in Total Produce's 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 |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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