Correlation Between ShaMaran Petroleum and Petroleo Brasileiro
Can any of the company-specific risk be diversified away by investing in both ShaMaran Petroleum and Petroleo Brasileiro 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 ShaMaran Petroleum and Petroleo Brasileiro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ShaMaran Petroleum Corp and Petroleo Brasileiro Petrobras, you can compare the effects of market volatilities on ShaMaran Petroleum and Petroleo Brasileiro 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 ShaMaran Petroleum with a short position of Petroleo Brasileiro. Check out your portfolio center. Please also check ongoing floating volatility patterns of ShaMaran Petroleum and Petroleo Brasileiro.
Diversification Opportunities for ShaMaran Petroleum and Petroleo Brasileiro
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ShaMaran and Petroleo is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding ShaMaran Petroleum Corp and Petroleo Brasileiro Petrobras in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petroleo Brasileiro and ShaMaran 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 ShaMaran Petroleum Corp are associated (or correlated) with Petroleo Brasileiro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petroleo Brasileiro has no effect on the direction of ShaMaran Petroleum i.e., ShaMaran Petroleum and Petroleo Brasileiro go up and down completely randomly.
Pair Corralation between ShaMaran Petroleum and Petroleo Brasileiro
Assuming the 90 days horizon ShaMaran Petroleum Corp is expected to generate 3.99 times more return on investment than Petroleo Brasileiro. However, ShaMaran Petroleum is 3.99 times more volatile than Petroleo Brasileiro Petrobras. It trades about 0.14 of its potential returns per unit of risk. Petroleo Brasileiro Petrobras is currently generating about -0.04 per unit of risk. If you would invest 6.00 in ShaMaran Petroleum Corp on September 3, 2024 and sell it today you would earn a total of 3.00 from holding ShaMaran Petroleum Corp or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ShaMaran Petroleum Corp vs. Petroleo Brasileiro Petrobras
Performance |
| Timeline |
| ShaMaran Petroleum Corp |
| Petroleo Brasileiro |
ShaMaran Petroleum and Petroleo Brasileiro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ShaMaran Petroleum and Petroleo Brasileiro
The main advantage of trading using opposite ShaMaran Petroleum and Petroleo Brasileiro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ShaMaran Petroleum position performs unexpectedly, Petroleo Brasileiro 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 Petroleo Brasileiro will offset losses from the drop in Petroleo Brasileiro's long position.| ShaMaran Petroleum vs. PetroShale | ShaMaran Petroleum vs. Africa Energy Corp | ShaMaran Petroleum vs. Horizon Oil Limited | ShaMaran Petroleum vs. Saturn Oil Gas |
| Petroleo Brasileiro vs. SPACE | Petroleo Brasileiro vs. Ampleforth | Petroleo Brasileiro vs. ionet | Petroleo Brasileiro vs. KIN |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Stocks Directory Find actively traded stocks across global markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |