Correlation Between Petrleo Brasileiro and ATT
Can any of the company-specific risk be diversified away by investing in both Petrleo Brasileiro and ATT 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 Petrleo Brasileiro and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petrleo Brasileiro SA and ATT Inc, you can compare the effects of market volatilities on Petrleo Brasileiro and ATT 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 Petrleo Brasileiro with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrleo Brasileiro and ATT.
Diversification Opportunities for Petrleo Brasileiro and ATT
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Petrleo and ATT is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Petrleo Brasileiro SA and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and Petrleo 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 Petrleo Brasileiro SA are associated (or correlated) with ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of Petrleo Brasileiro i.e., Petrleo Brasileiro and ATT go up and down completely randomly.
Pair Corralation between Petrleo Brasileiro and ATT
Assuming the 90 days trading horizon Petrleo Brasileiro SA is expected to generate 1.19 times more return on investment than ATT. However, Petrleo Brasileiro is 1.19 times more volatile than ATT Inc. It trades about 0.22 of its potential returns per unit of risk. ATT Inc is currently generating about 0.22 per unit of risk. If you would invest 27,250 in Petrleo Brasileiro SA on August 24, 2024 and sell it today you would earn a total of 1,750 from holding Petrleo Brasileiro SA or generate 6.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petrleo Brasileiro SA vs. ATT Inc
Performance |
| Timeline |
| Petrleo Brasileiro |
| ATT Inc |
Petrleo Brasileiro and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrleo Brasileiro and ATT
The main advantage of trading using opposite Petrleo Brasileiro and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrleo Brasileiro position performs unexpectedly, ATT 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 ATT will offset losses from the drop in ATT's long position.| Petrleo Brasileiro vs. DXC Technology | Petrleo Brasileiro vs. GMxico Transportes SAB | Petrleo Brasileiro vs. Lloyds Banking Group | Petrleo Brasileiro vs. New Oriental Education |
| ATT vs. Micron Technology | ATT vs. KB Home | ATT vs. Deutsche Bank Aktiengesellschaft | ATT vs. Grupo Hotelero Santa |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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