Correlation Between Petroleo Brasileiro and Begistics Public

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

Diversification Opportunities for Petroleo Brasileiro and Begistics Public

0.52

Correlation Coefficient

Petroleo Brasileiro  Begistics Public

Very weak diversification

The 3 months correlation between Petroleo and Begistics is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Begistics Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Begistics Public 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 Begistics Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Begistics Public has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Begistics Public go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and Begistics Public

Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to under-perform the Begistics Public. But the stock apears to be less risky and, when comparing its historical volatility, Petroleo Brasileiro Petrobras is 3.92 times less risky than Begistics Public. The stock trades about -0.02 of its potential returns per unit of risk. The Begistics Public is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  8.00  in Begistics Public on September 26, 2024 and sell it today you would earn a total of  0.00  from holding Begistics Public or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.56%
Values	Daily Returns

Petroleo Brasileiro Petrobras  vs.  Begistics Public

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.

Begistics Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Begistics Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Begistics Public is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Petroleo Brasileiro and Begistics Public

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

The idea behind Petroleo Brasileiro Petrobras and Begistics Public 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.