Correlation Between Pettenati and Bombril SA
Can any of the company-specific risk be diversified away by investing in both Pettenati and Bombril SA 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 Pettenati and Bombril SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pettenati SA Industria and Bombril SA, you can compare the effects of market volatilities on Pettenati and Bombril SA 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 Pettenati with a short position of Bombril SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pettenati and Bombril SA.
Diversification Opportunities for Pettenati and Bombril SA
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pettenati and Bombril is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Pettenati SA Industria and Bombril SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bombril SA and Pettenati 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 Pettenati SA Industria are associated (or correlated) with Bombril SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bombril SA has no effect on the direction of Pettenati i.e., Pettenati and Bombril SA go up and down completely randomly.
Pair Corralation between Pettenati and Bombril SA
Assuming the 90 days trading horizon Pettenati SA Industria is expected to under-perform the Bombril SA. But the preferred stock apears to be less risky and, when comparing its historical volatility, Pettenati SA Industria is 1.2 times less risky than Bombril SA. The preferred stock trades about -0.11 of its potential returns per unit of risk. The Bombril SA is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 224.00 in Bombril SA on September 5, 2024 and sell it today you would lose (8.00) from holding Bombril SA or give up 3.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pettenati SA Industria vs. Bombril SA
Performance |
| Timeline |
| Pettenati SA Industria |
| Bombril SA |
Pettenati and Bombril SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pettenati and Bombril SA
The main advantage of trading using opposite Pettenati and Bombril SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pettenati position performs unexpectedly, Bombril SA 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 Bombril SA will offset losses from the drop in Bombril SA's long position.| Pettenati vs. Schulz SA | Pettenati vs. Springs Global Participaes | Pettenati vs. Grazziotin SA | Pettenati vs. Marcopolo SA |
| Bombril SA vs. Minupar Participaes SA | Bombril SA vs. Grazziotin SA | Bombril SA vs. Banco da Amaznia | Bombril SA vs. Grazziotin 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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