Correlation Between Petroleo Brasileiro and Voya Financial
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Voya Financial 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 Voya Financial 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 Voya Financial, you can compare the effects of market volatilities on Petroleo Brasileiro and Voya Financial 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 Voya Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Voya Financial.
Diversification Opportunities for Petroleo Brasileiro and Voya Financial
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Petroleo and Voya is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Voya Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Financial 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 Voya Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Financial has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Voya Financial go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Voya Financial
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to under-perform the Voya Financial. In addition to that, Petroleo Brasileiro is 1.1 times more volatile than Voya Financial. It trades about -0.01 of its total potential returns per unit of risk. Voya Financial is currently generating about 0.01 per unit of volatility. If you would invest 6,434 in Voya Financial on September 20, 2024 and sell it today you would lose (84.00) from holding Voya Financial or give up 1.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.02% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. Voya Financial
Performance |
| Timeline |
| Petroleo Brasileiro |
| Voya Financial |
Petroleo Brasileiro and Voya Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Voya Financial
The main advantage of trading using opposite Petroleo Brasileiro and Voya Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Voya Financial 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 Voya Financial will offset losses from the drop in Voya Financial'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 |
| Voya Financial vs. Ebro Foods SA | Voya Financial vs. TYSON FOODS A | Voya Financial vs. PARKEN Sport Entertainment | Voya Financial vs. Kaiser Aluminum |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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