Correlation Between Refinaria and Pettenati
Can any of the company-specific risk be diversified away by investing in both Refinaria and Pettenati 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 Refinaria and Pettenati into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Refinaria de Petrleos and Pettenati SA Industria, you can compare the effects of market volatilities on Refinaria and Pettenati 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 Refinaria with a short position of Pettenati. Check out your portfolio center. Please also check ongoing floating volatility patterns of Refinaria and Pettenati.
Diversification Opportunities for Refinaria and Pettenati
Average diversification
The 3 months correlation between Refinaria and Pettenati is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Refinaria de Petrleos and Pettenati SA Industria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pettenati SA Industria and Refinaria 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 Refinaria de Petrleos are associated (or correlated) with Pettenati. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pettenati SA Industria has no effect on the direction of Refinaria i.e., Refinaria and Pettenati go up and down completely randomly.
Pair Corralation between Refinaria and Pettenati
Assuming the 90 days trading horizon Refinaria is expected to generate 6.68 times less return on investment than Pettenati. But when comparing it to its historical volatility, Refinaria de Petrleos is 1.39 times less risky than Pettenati. It trades about 0.07 of its potential returns per unit of risk. Pettenati SA Industria is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 579.00 in Pettenati SA Industria on November 18, 2024 and sell it today you would earn a total of 111.00 from holding Pettenati SA Industria or generate 19.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Refinaria de Petrleos vs. Pettenati SA Industria
Performance |
| Timeline |
| Refinaria de Petrleos |
| Pettenati SA Industria |
Refinaria and Pettenati Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Refinaria and Pettenati
The main advantage of trading using opposite Refinaria and Pettenati positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Refinaria position performs unexpectedly, Pettenati 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 Pettenati will offset losses from the drop in Pettenati's long position.| Refinaria vs. Lupatech SA | Refinaria vs. Recrusul SA | Refinaria vs. PDG Realty SA | Refinaria vs. OSX Brasil SA |
| Pettenati vs. Schulz SA | Pettenati vs. Springs Global Participaes | Pettenati vs. Grazziotin SA | Pettenati vs. Companhia de Tecidos |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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