Correlation Between Inhome Prime and Petroleo Brasileiro
Can any of the company-specific risk be diversified away by investing in both Inhome Prime 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 Inhome Prime and Petroleo Brasileiro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inhome Prime Properties and Petroleo Brasileiro SA, you can compare the effects of market volatilities on Inhome Prime 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 Inhome Prime with a short position of Petroleo Brasileiro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inhome Prime and Petroleo Brasileiro.
Diversification Opportunities for Inhome Prime and Petroleo Brasileiro
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Inhome and Petroleo is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Inhome Prime Properties and Petroleo Brasileiro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petroleo Brasileiro and Inhome Prime 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 Inhome Prime Properties 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 Inhome Prime i.e., Inhome Prime and Petroleo Brasileiro go up and down completely randomly.
Pair Corralation between Inhome Prime and Petroleo Brasileiro
Assuming the 90 days trading horizon Inhome Prime is expected to generate 75.5 times less return on investment than Petroleo Brasileiro. But when comparing it to its historical volatility, Inhome Prime Properties is 40.94 times less risky than Petroleo Brasileiro. It trades about 0.05 of its potential returns per unit of risk. Petroleo Brasileiro SA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 122.00 in Petroleo Brasileiro SA on September 2, 2024 and sell it today you would earn a total of 506.00 from holding Petroleo Brasileiro SA or generate 414.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.0% |
| Values | Daily Returns |
Inhome Prime Properties vs. Petroleo Brasileiro SA
Performance |
| Timeline |
| Inhome Prime Properties |
| Petroleo Brasileiro |
Inhome Prime and Petroleo Brasileiro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inhome Prime and Petroleo Brasileiro
The main advantage of trading using opposite Inhome Prime and Petroleo Brasileiro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inhome Prime 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.| Inhome Prime vs. Industria de Diseno | Inhome Prime vs. Iberdrola SA | Inhome Prime vs. Banco Santander | Inhome Prime vs. Caixabank SA |
| Petroleo Brasileiro vs. Repsol | Petroleo Brasileiro vs. Metrovacesa SA | Petroleo Brasileiro vs. Elecnor SA | Petroleo Brasileiro vs. Mapfre |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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