Correlation Between Petroleo Brasileiro and DSV Panalpina

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

Diversification Opportunities for Petroleo Brasileiro and DSV Panalpina

PetroleoDSVDiversified AwayPetroleoDSVDiversified Away100%
0.14
  Correlation Coefficient

Average diversification

The 3 months correlation between Petroleo and DSV is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and DSV Panalpina AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DSV Panalpina AS 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 DSV Panalpina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DSV Panalpina AS has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and DSV Panalpina go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and DSV Panalpina

Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to under-perform the DSV Panalpina. In addition to that, Petroleo Brasileiro is 1.33 times more volatile than DSV Panalpina AS. It trades about -0.01 of its total potential returns per unit of risk. DSV Panalpina AS is currently generating about 0.02 per unit of volatility. If you would invest  20,370  in DSV Panalpina AS on October 14, 2024 and sell it today you would earn a total of  140.00  from holding DSV Panalpina AS or generate 0.69% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy98.39%
ValuesDaily Returns

Petroleo Brasileiro Petrobras  vs.  DSV Panalpina AS

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -15-10-50
JavaScript chart by amCharts 3.21.15PBR DS81
       Timeline  
Petroleo Brasileiro 

Risk-Adjusted Performance

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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.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan12.51313.514
DSV Panalpina AS 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in DSV Panalpina AS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, DSV Panalpina is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan194196198200202204206208

Petroleo Brasileiro and DSV Panalpina Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.7-2.02-1.35-0.670.00.641.291.942.59 0.050.100.150.20
JavaScript chart by amCharts 3.21.15PBR DS81
       Returns  

Pair Trading with Petroleo Brasileiro and DSV Panalpina

The main advantage of trading using opposite Petroleo Brasileiro and DSV Panalpina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, DSV Panalpina 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 DSV Panalpina will offset losses from the drop in DSV Panalpina's long position.
The idea behind Petroleo Brasileiro Petrobras and DSV Panalpina AS 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.
Check out your portfolio center.
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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