Correlation Between Petroleo Brasileiro and Conifer Holdings

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

Diversification Opportunities for Petroleo Brasileiro and Conifer Holdings

-0.09

Correlation Coefficient

Petroleo Brasileiro  Conifer Holdings

Good diversification

The 3 months correlation between Petroleo and Conifer is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Conifer Holdings Senior in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conifer Holdings Senior 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 Conifer Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conifer Holdings Senior has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Conifer Holdings go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and Conifer Holdings

If you would invest  2,203  in Conifer Holdings Senior on September 29, 2024 and sell it today you would earn a total of  0.00  from holding Conifer Holdings Senior or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Petroleo Brasileiro Petrobras  vs.  Conifer Holdings Senior

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.

Conifer Holdings Senior

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Conifer Holdings Senior has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Conifer Holdings 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 Conifer Holdings

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

The idea behind Petroleo Brasileiro Petrobras and Conifer Holdings Senior 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.