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
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Petroleo and Beijing is -0.6. 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 under-perform the Beijing Compass. But the stock apears to be less risky and, when comparing its historical volatility, Petroleo Brasileiro Petrobras is 2.52 times less risky than Beijing Compass. The stock trades about -0.01 of its potential returns per unit of risk. The Beijing Compass Technology is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 5,639 in Beijing Compass Technology on September 20, 2024 and sell it today you would earn a total of 3,731 from holding Beijing Compass Technology or generate 66.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 95.97% |
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. Guangzhou Dongfang Hotel | Beijing Compass vs. Shandong Longquan Pipeline | Beijing Compass vs. XinJiang GuoTong Pipeline | Beijing Compass vs. Northern United Publishing |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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