Correlation Between Petroleo Brasileiro and KODEX 200LONGKOSDAQ150

Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and KODEX 200LONGKOSDAQ150 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 KODEX 200LONGKOSDAQ150 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 KODEX 200LONGKOSDAQ150SHORT Futures, you can compare the effects of market volatilities on Petroleo Brasileiro and KODEX 200LONGKOSDAQ150 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 KODEX 200LONGKOSDAQ150. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and KODEX 200LONGKOSDAQ150.

Diversification Opportunities for Petroleo Brasileiro and KODEX 200LONGKOSDAQ150

-0.14

Correlation Coefficient

Petroleo Brasileiro  KODEX 200LONGKOSDAQ150

Good diversification

The 3 months correlation between Petroleo and KODEX is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and KODEX 200LONGKOSDAQ150SHORT Fu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KODEX 200LONGKOSDAQ150 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 KODEX 200LONGKOSDAQ150. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KODEX 200LONGKOSDAQ150 has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and KODEX 200LONGKOSDAQ150 go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and KODEX 200LONGKOSDAQ150

Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to generate 1.58 times more return on investment than KODEX 200LONGKOSDAQ150. However, Petroleo Brasileiro is 1.58 times more volatile than KODEX 200LONGKOSDAQ150SHORT Futures. It trades about 0.08 of its potential returns per unit of risk. KODEX 200LONGKOSDAQ150SHORT Futures is currently generating about -0.02 per unit of risk. If you would invest  656.00  in Petroleo Brasileiro Petrobras on September 25, 2024 and sell it today you would earn a total of  637.00  from holding Petroleo Brasileiro Petrobras or generate 97.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.58%
Values	Daily Returns

Petroleo Brasileiro Petrobras  vs.  KODEX 200LONGKOSDAQ150SHORT Fu

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 latest conflicting performance, the Stock's fundamental drivers remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

KODEX 200LONGKOSDAQ150

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in KODEX 200LONGKOSDAQ150SHORT Futures are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, KODEX 200LONGKOSDAQ150 may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Petroleo Brasileiro and KODEX 200LONGKOSDAQ150

The main advantage of trading using opposite Petroleo Brasileiro and KODEX 200LONGKOSDAQ150 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, KODEX 200LONGKOSDAQ150 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 KODEX 200LONGKOSDAQ150 will offset losses from the drop in KODEX 200LONGKOSDAQ150's long position.

The idea behind Petroleo Brasileiro Petrobras and KODEX 200LONGKOSDAQ150SHORT Futures 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .