Correlation Between Petroleo Brasileiro and Nordnet One

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

By analyzing existing cross correlation between Petroleo Brasileiro Petrobras and Nordnet One Forsiktig, you can compare the effects of market volatilities on Petroleo Brasileiro and Nordnet One 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 Nordnet One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Nordnet One.

Diversification Opportunities for Petroleo Brasileiro and Nordnet One

-0.29

Correlation Coefficient

Petroleo Brasileiro  Nordnet One

Very good diversification

The 3 months correlation between Petroleo and Nordnet is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Nordnet One Forsiktig in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordnet One Forsiktig 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 Petrobras are associated (or correlated) with Nordnet One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordnet One Forsiktig has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Nordnet One go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and Nordnet One

Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to under-perform the Nordnet One. In addition to that, Petroleo Brasileiro is 7.19 times more volatile than Nordnet One Forsiktig. It trades about -0.03 of its total potential returns per unit of risk. Nordnet One Forsiktig is currently generating about 0.21 per unit of volatility. If you would invest  12,270  in Nordnet One Forsiktig on September 15, 2024 and sell it today you would earn a total of  345.00  from holding Nordnet One Forsiktig or generate 2.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Petroleo Brasileiro Petrobras  vs.  Nordnet One Forsiktig

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.

Nordnet One Forsiktig

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nordnet One Forsiktig are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively invariable basic indicators, Nordnet One is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Petroleo Brasileiro and Nordnet One

The main advantage of trading using opposite Petroleo Brasileiro and Nordnet One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Nordnet One 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 Nordnet One will offset losses from the drop in Nordnet One's long position.

The idea behind Petroleo Brasileiro Petrobras and Nordnet One Forsiktig 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.