Correlation Between Petroleo Brasileiro and Media Investment
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Media Investment 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 Media Investment 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 Media Investment Optimization, you can compare the effects of market volatilities on Petroleo Brasileiro and Media Investment 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 Media Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Media Investment.
Diversification Opportunities for Petroleo Brasileiro and Media Investment
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Petroleo and Media is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro SA and Media Investment Optimization in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media Investment Opt 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 Media Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media Investment Opt has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Media Investment go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Media Investment
Assuming the 90 days trading horizon Petroleo Brasileiro SA is expected to generate 3.27 times more return on investment than Media Investment. However, Petroleo Brasileiro is 3.27 times more volatile than Media Investment Optimization. It trades about 0.1 of its potential returns per unit of risk. Media Investment Optimization is currently generating about -0.03 per unit of risk. If you would invest 150.00 in Petroleo Brasileiro SA on October 25, 2024 and sell it today you would earn a total of 475.00 from holding Petroleo Brasileiro SA or generate 316.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 92.65% |
| Values | Daily Returns |
Petroleo Brasileiro SA vs. Media Investment Optimization
Performance |
| Timeline |
| Petroleo Brasileiro |
| Media Investment Opt |
Petroleo Brasileiro and Media Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Media Investment
The main advantage of trading using opposite Petroleo Brasileiro and Media Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Media Investment 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 Media Investment will offset losses from the drop in Media Investment's long position.| Petroleo Brasileiro vs. Techo Hogar SOCIMI, | Petroleo Brasileiro vs. International Consolidated Airlines | Petroleo Brasileiro vs. Aedas Homes SL | Petroleo Brasileiro vs. Arrienda Rental Properties |
| Media Investment vs. Ebro Foods | Media Investment vs. Home Capital Rentals | Media Investment vs. International Consolidated Airlines |
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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