Correlation Between Petrleo Brasileiro and Bahema Educao
Can any of the company-specific risk be diversified away by investing in both Petrleo Brasileiro and Bahema Educao 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 Bahema Educao 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 Bahema Educao SA, you can compare the effects of market volatilities on Petrleo Brasileiro and Bahema Educao 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 Bahema Educao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrleo Brasileiro and Bahema Educao.
Diversification Opportunities for Petrleo Brasileiro and Bahema Educao
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Petrleo and Bahema is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Petrleo Brasileiro SA and Bahema Educao SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bahema Educao SA 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 Bahema Educao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bahema Educao SA has no effect on the direction of Petrleo Brasileiro i.e., Petrleo Brasileiro and Bahema Educao go up and down completely randomly.
Pair Corralation between Petrleo Brasileiro and Bahema Educao
Assuming the 90 days trading horizon Petrleo Brasileiro SA is expected to generate 0.35 times more return on investment than Bahema Educao. However, Petrleo Brasileiro SA is 2.88 times less risky than Bahema Educao. It trades about 0.06 of its potential returns per unit of risk. Bahema Educao SA is currently generating about -0.1 per unit of risk. If you would invest 3,473 in Petrleo Brasileiro SA on November 1, 2024 and sell it today you would earn a total of 217.00 from holding Petrleo Brasileiro SA or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.75% |
| Values | Daily Returns |
Petrleo Brasileiro SA vs. Bahema Educao SA
Performance |
| Timeline |
| Petrleo Brasileiro |
| Bahema Educao SA |
Petrleo Brasileiro and Bahema Educao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrleo Brasileiro and Bahema Educao
The main advantage of trading using opposite Petrleo Brasileiro and Bahema Educao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrleo Brasileiro position performs unexpectedly, Bahema Educao 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 Bahema Educao will offset losses from the drop in Bahema Educao's long position.| Petrleo Brasileiro vs. Vale SA | Petrleo Brasileiro vs. Banco do Brasil | Petrleo Brasileiro vs. Banco Bradesco SA | Petrleo Brasileiro vs. Ita Unibanco Holding |
| Bahema Educao vs. Biomm SA | Bahema Educao vs. GAEC Educacao SA | Bahema Educao vs. T4F Entretenimento SA | Bahema Educao vs. Ser Educacional Sa |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |