Correlation Between Petrleo Brasileiro and Financeira Alfa
Can any of the company-specific risk be diversified away by investing in both Petrleo Brasileiro and Financeira Alfa 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 Financeira Alfa 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 Financeira Alfa SA, you can compare the effects of market volatilities on Petrleo Brasileiro and Financeira Alfa 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 Financeira Alfa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrleo Brasileiro and Financeira Alfa.
Diversification Opportunities for Petrleo Brasileiro and Financeira Alfa
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Petrleo and Financeira is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Petrleo Brasileiro SA and Financeira Alfa SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financeira Alfa 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 Financeira Alfa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financeira Alfa SA has no effect on the direction of Petrleo Brasileiro i.e., Petrleo Brasileiro and Financeira Alfa go up and down completely randomly.
Pair Corralation between Petrleo Brasileiro and Financeira Alfa
If you would invest 3,625 in Petrleo Brasileiro SA on September 12, 2024 and sell it today you would earn a total of 394.00 from holding Petrleo Brasileiro SA or generate 10.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petrleo Brasileiro SA vs. Financeira Alfa SA
Performance |
| Timeline |
| Petrleo Brasileiro |
| Financeira Alfa SA |
Petrleo Brasileiro and Financeira Alfa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrleo Brasileiro and Financeira Alfa
The main advantage of trading using opposite Petrleo Brasileiro and Financeira Alfa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrleo Brasileiro position performs unexpectedly, Financeira Alfa 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 Financeira Alfa will offset losses from the drop in Financeira Alfa'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 |
| Financeira Alfa vs. Banco Bradesco SA | Financeira Alfa vs. Petrleo Brasileiro SA | Financeira Alfa vs. Ita Unibanco Holding | Financeira Alfa vs. Itasa Investimentos |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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