Correlation Between Petroleo Brasileiro and Fa529 Gr

Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Fa529 Gr 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 Fa529 Gr 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 Fa529 Gr Op, you can compare the effects of market volatilities on Petroleo Brasileiro and Fa529 Gr 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 Fa529 Gr. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Fa529 Gr.

Diversification Opportunities for Petroleo Brasileiro and Fa529 Gr

-0.35

Correlation Coefficient

Petroleo Brasileiro  Fa529 Gr

Very good diversification

The 3 months correlation between Petroleo and Fa529 is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Fa529 Gr Op in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fa529 Gr Op 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 Fa529 Gr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fa529 Gr Op has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Fa529 Gr go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and Fa529 Gr

Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to under-perform the Fa529 Gr. In addition to that, Petroleo Brasileiro is 1.46 times more volatile than Fa529 Gr Op. It trades about -0.24 of its total potential returns per unit of risk. Fa529 Gr Op is currently generating about 0.09 per unit of volatility. If you would invest  7,750  in Fa529 Gr Op on September 23, 2024 and sell it today you would earn a total of  173.00  from holding Fa529 Gr Op or generate 2.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Petroleo Brasileiro Petrobras  vs.  Fa529 Gr Op

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.

Fa529 Gr Op

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fa529 Gr Op are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Fa529 Gr may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Petroleo Brasileiro and Fa529 Gr

The main advantage of trading using opposite Petroleo Brasileiro and Fa529 Gr positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Fa529 Gr 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 Fa529 Gr will offset losses from the drop in Fa529 Gr's long position.

The idea behind Petroleo Brasileiro Petrobras and Fa529 Gr Op 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.