Correlation Between Petroleo Brasileiro and FundX ETF
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and FundX ETF 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 FundX ETF 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 FundX ETF, you can compare the effects of market volatilities on Petroleo Brasileiro and FundX ETF 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 FundX ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and FundX ETF.
Diversification Opportunities for Petroleo Brasileiro and FundX ETF
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Petroleo and FundX is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and FundX ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FundX ETF 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 FundX ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FundX ETF has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and FundX ETF go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and FundX ETF
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to generate 2.47 times more return on investment than FundX ETF. However, Petroleo Brasileiro is 2.47 times more volatile than FundX ETF. It trades about 0.1 of its potential returns per unit of risk. FundX ETF is currently generating about 0.17 per unit of risk. If you would invest 1,372 in Petroleo Brasileiro Petrobras on September 13, 2024 and sell it today you would earn a total of 54.00 from holding Petroleo Brasileiro Petrobras or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. FundX ETF
Performance |
| Timeline |
| Petroleo Brasileiro |
| FundX ETF |
Petroleo Brasileiro and FundX ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and FundX ETF
The main advantage of trading using opposite Petroleo Brasileiro and FundX ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, FundX ETF 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 FundX ETF will offset losses from the drop in FundX ETF'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 |
| FundX ETF vs. Freedom Day Dividend | FundX ETF vs. Franklin Templeton ETF | FundX ETF vs. iShares MSCI China | FundX ETF vs. Tidal Trust II |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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