Correlation Between Petroleo Brasileiro and Anadolu Efes

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

Diversification Opportunities for Petroleo Brasileiro and Anadolu Efes

0.38

Correlation Coefficient

Petroleo Brasileiro  Anadolu Efes

Weak diversification

The 3 months correlation between Petroleo and Anadolu is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Anadolu Efes Biracilik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anadolu Efes Biracilik 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 Anadolu Efes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anadolu Efes Biracilik has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Anadolu Efes go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and Anadolu Efes

Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to under-perform the Anadolu Efes. But the stock apears to be less risky and, when comparing its historical volatility, Petroleo Brasileiro Petrobras is 2.15 times less risky than Anadolu Efes. The stock trades about -0.03 of its potential returns per unit of risk. The Anadolu Efes Biracilik is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  127.00  in Anadolu Efes Biracilik on September 14, 2024 and sell it today you would earn a total of  5.00  from holding Anadolu Efes Biracilik or generate 3.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Petroleo Brasileiro Petrobras  vs.  Anadolu Efes Biracilik

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.

Anadolu Efes Biracilik

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Anadolu Efes Biracilik are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Anadolu Efes may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Petroleo Brasileiro and Anadolu Efes

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

The idea behind Petroleo Brasileiro Petrobras and Anadolu Efes Biracilik 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.