Correlation Between Petroleo Brasileiro and Aena SA
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Aena 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 Petroleo Brasileiro and Aena SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petroleo Brasileiro SA and Aena SA, you can compare the effects of market volatilities on Petroleo Brasileiro and Aena 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 Petroleo Brasileiro with a short position of Aena SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Aena SA.
Diversification Opportunities for Petroleo Brasileiro and Aena SA
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Petroleo and Aena is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro SA and Aena SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aena SA and Petroleo Brasileiro 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 Petroleo Brasileiro SA are associated (or correlated) with Aena SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aena SA has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Aena SA go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Aena SA
Assuming the 90 days trading horizon Petroleo Brasileiro SA is expected to generate 1.28 times more return on investment than Aena SA. However, Petroleo Brasileiro is 1.28 times more volatile than Aena SA. It trades about 0.12 of its potential returns per unit of risk. Aena SA is currently generating about 0.15 per unit of risk. If you would invest 619.00 in Petroleo Brasileiro SA on November 3, 2024 and sell it today you would earn a total of 21.00 from holding Petroleo Brasileiro SA or generate 3.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petroleo Brasileiro SA vs. Aena SA
Performance |
| Timeline |
| Petroleo Brasileiro |
| Aena SA |
Petroleo Brasileiro and Aena SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Aena SA
The main advantage of trading using opposite Petroleo Brasileiro and Aena SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Aena 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 Aena SA will offset losses from the drop in Aena SA's long position.| Petroleo Brasileiro vs. Media Investment Optimization | Petroleo Brasileiro vs. Millenium Hotels Real | Petroleo Brasileiro vs. NH Hoteles | Petroleo Brasileiro vs. Atresmedia Corporacin de |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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