Correlation Between Petroleo Brasileiro and Zomato
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By analyzing existing cross correlation between Petroleo Brasileiro Petrobras and Zomato Limited, you can compare the effects of market volatilities on Petroleo Brasileiro and Zomato 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 Zomato. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Zomato.
Diversification Opportunities for Petroleo Brasileiro and Zomato
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Petroleo and Zomato is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Zomato Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zomato Limited 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 Zomato. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zomato Limited has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Zomato go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Zomato
Considering the 90-day investment horizon Petroleo Brasileiro is expected to generate 11.87 times less return on investment than Zomato. But when comparing it to its historical volatility, Petroleo Brasileiro Petrobras is 1.26 times less risky than Zomato. It trades about 0.02 of its potential returns per unit of risk. Zomato Limited is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 11,815 in Zomato Limited on September 15, 2024 and sell it today you would earn a total of 17,010 from holding Zomato Limited or generate 143.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.88% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. Zomato Limited
Performance |
| Timeline |
| Petroleo Brasileiro |
| Zomato Limited |
Petroleo Brasileiro and Zomato Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Zomato
The main advantage of trading using opposite Petroleo Brasileiro and Zomato positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Zomato 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 Zomato will offset losses from the drop in Zomato'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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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