Correlation Between Petroleo Brasileiro and Beijing Compass
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By analyzing existing cross correlation between Petroleo Brasileiro Petrobras and Beijing Compass Technology, you can compare the effects of market volatilities on Petroleo Brasileiro and Beijing Compass 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 Beijing Compass. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Beijing Compass.
Diversification Opportunities for Petroleo Brasileiro and Beijing Compass
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Petroleo and Beijing is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Beijing Compass Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Compass Tech 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 Beijing Compass. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Compass Tech has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Beijing Compass go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Beijing Compass
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to generate 0.74 times more return on investment than Beijing Compass. However, Petroleo Brasileiro Petrobras is 1.36 times less risky than Beijing Compass. It trades about -0.2 of its potential returns per unit of risk. Beijing Compass Technology is currently generating about -0.17 per unit of risk. If you would invest 1,389 in Petroleo Brasileiro Petrobras on December 10, 2024 and sell it today you would lose (111.00) from holding Petroleo Brasileiro Petrobras or give up 7.99% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.24% |
Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. Beijing Compass Technology
Performance |
Timeline |
Petroleo Brasileiro |
Beijing Compass Tech |
Petroleo Brasileiro and Beijing Compass Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Petroleo Brasileiro and Beijing Compass
The main advantage of trading using opposite Petroleo Brasileiro and Beijing Compass positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Beijing Compass 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 Beijing Compass will offset losses from the drop in Beijing Compass' long position.Petroleo Brasileiro vs. Ecopetrol SA ADR | Petroleo Brasileiro vs. Equinor ASA ADR | Petroleo Brasileiro vs. Eni SpA ADR | Petroleo Brasileiro vs. Cenovus Energy |
Beijing Compass vs. Anhui Xinhua Media | Beijing Compass vs. Shenzhen Bioeasy Biotechnology | Beijing Compass vs. Shandong Sanyuan Biotechnology | Beijing Compass vs. Cansino Biologics |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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