Correlation Between Mccoy Global and Petroleo Brasileiro

Can any of the company-specific risk be diversified away by investing in both Mccoy Global 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 Mccoy Global and Petroleo Brasileiro into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mccoy Global and Petroleo Brasileiro Petrobras, you can compare the effects of market volatilities on Mccoy Global 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 Mccoy Global with a short position of Petroleo Brasileiro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mccoy Global and Petroleo Brasileiro.

Diversification Opportunities for Mccoy Global and Petroleo Brasileiro

-0.69

Correlation Coefficient

Mccoy Global  Petroleo Brasileiro

Excellent diversification

The 3 months correlation between Mccoy and Petroleo is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Mccoy Global and Petroleo Brasileiro Petrobras in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petroleo Brasileiro and Mccoy Global 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 Mccoy Global 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 Mccoy Global i.e., Mccoy Global and Petroleo Brasileiro go up and down completely randomly.

Pair Corralation between Mccoy Global and Petroleo Brasileiro

Assuming the 90 days horizon Mccoy Global is expected to generate 2.46 times more return on investment than Petroleo Brasileiro. However, Mccoy Global is 2.46 times more volatile than Petroleo Brasileiro Petrobras. It trades about 0.18 of its potential returns per unit of risk. Petroleo Brasileiro Petrobras is currently generating about -0.04 per unit of risk. If you would invest  145.00  in Mccoy Global on September 2, 2024 and sell it today you would earn a total of  67.00  from holding Mccoy Global or generate 46.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Mccoy Global  vs.  Petroleo Brasileiro Petrobras

Mccoy Global

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mccoy Global are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Mccoy Global reported solid returns over the last few months and may actually be approaching a breakup point.

Petroleo Brasileiro

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Petroleo Brasileiro Petrobras has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, Petroleo Brasileiro is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Mccoy Global and Petroleo Brasileiro

The main advantage of trading using opposite Mccoy Global and Petroleo Brasileiro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mccoy Global 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.

The idea behind Mccoy Global and Petroleo Brasileiro Petrobras pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.