Correlation Between Petroleo Brasileiro and Clinica Baviera
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Clinica Baviera 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 Clinica Baviera 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 Clinica Baviera, you can compare the effects of market volatilities on Petroleo Brasileiro and Clinica Baviera 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 Clinica Baviera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Clinica Baviera.
Diversification Opportunities for Petroleo Brasileiro and Clinica Baviera
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Petroleo and Clinica is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro SA and Clinica Baviera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clinica Baviera 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 Clinica Baviera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clinica Baviera has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Clinica Baviera go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Clinica Baviera
Assuming the 90 days trading horizon Petroleo Brasileiro SA is expected to generate 71.9 times more return on investment than Clinica Baviera. However, Petroleo Brasileiro is 71.9 times more volatile than Clinica Baviera. It trades about 0.13 of its potential returns per unit of risk. Clinica Baviera is currently generating about 0.09 per unit of risk. If you would invest 16.00 in Petroleo Brasileiro SA on September 3, 2024 and sell it today you would earn a total of 612.00 from holding Petroleo Brasileiro SA or generate 3825.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.48% |
| Values | Daily Returns |
Petroleo Brasileiro SA vs. Clinica Baviera
Performance |
| Timeline |
| Petroleo Brasileiro |
| Clinica Baviera |
Petroleo Brasileiro and Clinica Baviera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Clinica Baviera
The main advantage of trading using opposite Petroleo Brasileiro and Clinica Baviera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Clinica Baviera 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 Clinica Baviera will offset losses from the drop in Clinica Baviera's long position.| Petroleo Brasileiro vs. Atrys Health SL | Petroleo Brasileiro vs. Borges Agricultural Industrial | Petroleo Brasileiro vs. Elaia Investment Spain | Petroleo Brasileiro vs. Melia Hotels |
| Clinica Baviera vs. Miquel y Costas | Clinica Baviera vs. Azkoyen | Clinica Baviera vs. Vidrala SA | Clinica Baviera vs. Construcciones y Auxiliar |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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