Correlation Between Techo Hogar and Petroleo Brasileiro
Can any of the company-specific risk be diversified away by investing in both Techo Hogar 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 Techo Hogar and Petroleo Brasileiro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Techo Hogar SOCIMI, and Petroleo Brasileiro SA, you can compare the effects of market volatilities on Techo Hogar 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 Techo Hogar with a short position of Petroleo Brasileiro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Techo Hogar and Petroleo Brasileiro.
Diversification Opportunities for Techo Hogar and Petroleo Brasileiro
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Techo and Petroleo is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Techo Hogar SOCIMI, and Petroleo Brasileiro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petroleo Brasileiro and Techo Hogar 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 Techo Hogar SOCIMI, 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 Techo Hogar i.e., Techo Hogar and Petroleo Brasileiro go up and down completely randomly.
Pair Corralation between Techo Hogar and Petroleo Brasileiro
Assuming the 90 days trading horizon Techo Hogar is expected to generate 710.78 times less return on investment than Petroleo Brasileiro. But when comparing it to its historical volatility, Techo Hogar SOCIMI, is 183.0 times less risky than Petroleo Brasileiro. It trades about 0.03 of its potential returns per unit of risk. Petroleo Brasileiro SA is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Petroleo Brasileiro SA on November 4, 2024 and sell it today you would earn a total of 629.00 from holding Petroleo Brasileiro SA or generate 5718.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 42.27% |
| Values | Daily Returns |
Techo Hogar SOCIMI, vs. Petroleo Brasileiro SA
Performance |
| Timeline |
| Techo Hogar SOCIMI, |
| Petroleo Brasileiro |
Techo Hogar and Petroleo Brasileiro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Techo Hogar and Petroleo Brasileiro
The main advantage of trading using opposite Techo Hogar and Petroleo Brasileiro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Techo Hogar 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.| Techo Hogar vs. Airbus Group SE | Techo Hogar vs. Industria de Diseno | Techo Hogar vs. Vale SA | Techo Hogar vs. Iberdrola SA |
| Petroleo Brasileiro vs. Media Investment Optimization | Petroleo Brasileiro vs. Aedas Homes SL | Petroleo Brasileiro vs. Atrys Health SL | Petroleo Brasileiro vs. Technomeca Aerospace SA |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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