Correlation Between Petroleo Brasileiro and Bernard Loisea

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

Diversification Opportunities for Petroleo Brasileiro and Bernard Loisea

-0.34

Correlation Coefficient

Petroleo Brasileiro  Bernard Loisea

Very good diversification

The 3 months correlation between Petroleo and Bernard is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Bernard Loisea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bernard Loisea 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 Bernard Loisea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bernard Loisea has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Bernard Loisea go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and Bernard Loisea

Considering the 90-day investment horizon Petroleo Brasileiro is expected to generate 2.71 times less return on investment than Bernard Loisea. But when comparing it to its historical volatility, Petroleo Brasileiro Petrobras is 1.36 times less risky than Bernard Loisea. It trades about 0.03 of its potential returns per unit of risk. Bernard Loisea is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  322.00  in Bernard Loisea on December 4, 2024 and sell it today you would earn a total of  26.00  from holding Bernard Loisea or generate 8.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.16%
Values	Daily Returns

Petroleo Brasileiro Petrobras  vs.  Bernard Loisea

Petroleo Brasileiro

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Petroleo Brasileiro Petrobras are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Bernard Loisea

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bernard Loisea are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Bernard Loisea may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Petroleo Brasileiro and Bernard Loisea

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

The idea behind Petroleo Brasileiro Petrobras and Bernard Loisea 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.