Correlation Between Stabilis Solutions and Petróleo Brasileiro
Can any of the company-specific risk be diversified away by investing in both Stabilis Solutions and Petróleo 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 Stabilis Solutions and Petróleo Brasileiro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stabilis Solutions and Petrleo Brasileiro SA, you can compare the effects of market volatilities on Stabilis Solutions and Petróleo 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 Stabilis Solutions with a short position of Petróleo Brasileiro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stabilis Solutions and Petróleo Brasileiro.
Diversification Opportunities for Stabilis Solutions and Petróleo Brasileiro
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stabilis and Petróleo is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Stabilis Solutions and Petrleo Brasileiro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petróleo Brasileiro and Stabilis Solutions 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 Stabilis Solutions are associated (or correlated) with Petróleo Brasileiro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petróleo Brasileiro has no effect on the direction of Stabilis Solutions i.e., Stabilis Solutions and Petróleo Brasileiro go up and down completely randomly.
Pair Corralation between Stabilis Solutions and Petróleo Brasileiro
Given the investment horizon of 90 days Stabilis Solutions is expected to generate 5.13 times less return on investment than Petróleo Brasileiro. In addition to that, Stabilis Solutions is 1.66 times more volatile than Petrleo Brasileiro SA. It trades about 0.01 of its total potential returns per unit of risk. Petrleo Brasileiro SA is currently generating about 0.07 per unit of volatility. If you would invest 689.00 in Petrleo Brasileiro SA on August 29, 2024 and sell it today you would earn a total of 626.00 from holding Petrleo Brasileiro SA or generate 90.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stabilis Solutions vs. Petrleo Brasileiro SA
Performance |
| Timeline |
| Stabilis Solutions |
| Petróleo Brasileiro |
Stabilis Solutions and Petróleo Brasileiro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stabilis Solutions and Petróleo Brasileiro
The main advantage of trading using opposite Stabilis Solutions and Petróleo Brasileiro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stabilis Solutions position performs unexpectedly, Petróleo 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 Petróleo Brasileiro will offset losses from the drop in Petróleo Brasileiro's long position.| Stabilis Solutions vs. Equinor ASA ADR | Stabilis Solutions vs. TotalEnergies SE ADR | Stabilis Solutions vs. Ecopetrol SA ADR | Stabilis Solutions vs. National Fuel Gas |
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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.
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