Correlation Between Petroleo Brasileiro and Asiri Surgical

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

Diversification Opportunities for Petroleo Brasileiro and Asiri Surgical

-0.18

Correlation Coefficient

Petroleo Brasileiro  Asiri Surgical

Good diversification

The 3 months correlation between Petroleo and Asiri is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Asiri Surgical Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asiri Surgical Hospital 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 Asiri Surgical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asiri Surgical Hospital has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Asiri Surgical go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and Asiri Surgical

Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to under-perform the Asiri Surgical. In addition to that, Petroleo Brasileiro is 1.56 times more volatile than Asiri Surgical Hospital. It trades about -0.06 of its total potential returns per unit of risk. Asiri Surgical Hospital is currently generating about -0.09 per unit of volatility. If you would invest  1,110  in Asiri Surgical Hospital on September 19, 2024 and sell it today you would lose (30.00) from holding Asiri Surgical Hospital or give up 2.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Petroleo Brasileiro Petrobras  vs.  Asiri Surgical Hospital

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.

Asiri Surgical Hospital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asiri Surgical Hospital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Asiri Surgical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Petroleo Brasileiro and Asiri Surgical

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

The idea behind Petroleo Brasileiro Petrobras and Asiri Surgical Hospital 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.