Correlation Between Petroleo Brasileiro and Uber Technologies
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Uber Technologies 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 Uber Technologies 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 Uber Technologies, you can compare the effects of market volatilities on Petroleo Brasileiro and Uber Technologies 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 Uber Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Uber Technologies.
Diversification Opportunities for Petroleo Brasileiro and Uber Technologies
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Petroleo and Uber is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies 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 Uber Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uber Technologies has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Uber Technologies go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Uber Technologies
Considering the 90-day investment horizon Petroleo Brasileiro is expected to generate 129.5 times less return on investment than Uber Technologies. But when comparing it to its historical volatility, Petroleo Brasileiro Petrobras is 1.39 times less risky than Uber Technologies. It trades about 0.0 of its potential returns per unit of risk. Uber Technologies is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 5,620 in Uber Technologies on September 24, 2024 and sell it today you would earn a total of 250.00 from holding Uber Technologies or generate 4.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.42% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. Uber Technologies
Performance |
| Timeline |
| Petroleo Brasileiro |
| Uber Technologies |
Petroleo Brasileiro and Uber Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Uber Technologies
The main advantage of trading using opposite Petroleo Brasileiro and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Uber Technologies 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 Uber Technologies will offset losses from the drop in Uber Technologies' 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 |
| Uber Technologies vs. BW OFFSHORE LTD | Uber Technologies vs. Jacquet Metal Service | Uber Technologies vs. WT OFFSHORE | Uber Technologies vs. ADRIATIC METALS LS 013355 |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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