Correlation Between 3R Petroleum and SIMPAR SA
Can any of the company-specific risk be diversified away by investing in both 3R Petroleum and SIMPAR 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 3R Petroleum and SIMPAR SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 3R Petroleum leo and SIMPAR SA, you can compare the effects of market volatilities on 3R Petroleum and SIMPAR 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 3R Petroleum with a short position of SIMPAR SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3R Petroleum and SIMPAR SA.
Diversification Opportunities for 3R Petroleum and SIMPAR SA
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between RRRP3 and SIMPAR is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding 3R Petroleum leo and SIMPAR SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIMPAR SA and 3R Petroleum 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 3R Petroleum leo are associated (or correlated) with SIMPAR SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIMPAR SA has no effect on the direction of 3R Petroleum i.e., 3R Petroleum and SIMPAR SA go up and down completely randomly.
Pair Corralation between 3R Petroleum and SIMPAR SA
Assuming the 90 days trading horizon 3R Petroleum leo is expected to under-perform the SIMPAR SA. But the stock apears to be less risky and, when comparing its historical volatility, 3R Petroleum leo is 1.96 times less risky than SIMPAR SA. The stock trades about -0.15 of its potential returns per unit of risk. The SIMPAR SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 544.00 in SIMPAR SA on August 28, 2024 and sell it today you would earn a total of 18.00 from holding SIMPAR SA or generate 3.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 57.89% |
| Values | Daily Returns |
3R Petroleum leo vs. SIMPAR SA
Performance |
| Timeline |
| 3R Petroleum leo |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SIMPAR SA |
3R Petroleum and SIMPAR SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 3R Petroleum and SIMPAR SA
The main advantage of trading using opposite 3R Petroleum and SIMPAR SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3R Petroleum position performs unexpectedly, SIMPAR 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 SIMPAR SA will offset losses from the drop in SIMPAR SA's long position.| 3R Petroleum vs. Petro Rio SA | 3R Petroleum vs. Banco BTG Pactual | 3R Petroleum vs. Ambipar Participaes e | 3R Petroleum vs. Mliuz SA |
| SIMPAR SA vs. Ambipar Participaes e | SIMPAR SA vs. Vamos Locao de | SIMPAR SA vs. Movida Participaes SA | SIMPAR SA vs. Petro Rio 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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |