Correlation Between Petroleo Brasileiro and Samhyun

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

Diversification Opportunities for Petroleo Brasileiro and Samhyun

-0.23

Correlation Coefficient

Petroleo Brasileiro  Samhyun

Very good diversification

The 3 months correlation between Petroleo and Samhyun is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Samhyun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhyun 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 Samhyun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhyun has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Samhyun go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and Samhyun

Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to generate 0.39 times more return on investment than Samhyun. However, Petroleo Brasileiro Petrobras is 2.58 times less risky than Samhyun. It trades about 0.07 of its potential returns per unit of risk. Samhyun is currently generating about -0.03 per unit of risk. If you would invest  668.00  in Petroleo Brasileiro Petrobras on September 30, 2024 and sell it today you would earn a total of  593.00  from holding Petroleo Brasileiro Petrobras or generate 88.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	38.23%
Values	Daily Returns

Petroleo Brasileiro Petrobras  vs.  Samhyun

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.

Samhyun

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Samhyun are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Samhyun sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Petroleo Brasileiro and Samhyun

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

The idea behind Petroleo Brasileiro Petrobras and Samhyun 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.