Correlation Between Petroleo Brasileiro and Galenfeha
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Galenfeha 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 Galenfeha 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 Galenfeha, you can compare the effects of market volatilities on Petroleo Brasileiro and Galenfeha 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 Galenfeha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Galenfeha.
Diversification Opportunities for Petroleo Brasileiro and Galenfeha
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Petroleo and Galenfeha is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Galenfeha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galenfeha 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 Galenfeha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galenfeha has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Galenfeha go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Galenfeha
Considering the 90-day investment horizon Petroleo Brasileiro is expected to generate 33.48 times less return on investment than Galenfeha. But when comparing it to its historical volatility, Petroleo Brasileiro Petrobras is 32.33 times less risky than Galenfeha. It trades about 0.08 of its potential returns per unit of risk. Galenfeha is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3.31 in Galenfeha on September 24, 2024 and sell it today you would earn a total of 1,047 from holding Galenfeha or generate 31622.05% 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. Galenfeha
Performance |
Timeline |
Petroleo Brasileiro |
Galenfeha |
Petroleo Brasileiro and Galenfeha Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Petroleo Brasileiro and Galenfeha
The main advantage of trading using opposite Petroleo Brasileiro and Galenfeha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Galenfeha 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 Galenfeha will offset losses from the drop in Galenfeha's long position.Petroleo Brasileiro vs. Ecopetrol SA ADR | Petroleo Brasileiro vs. Equinor ASA ADR | Petroleo Brasileiro vs. Eni SpA ADR | Petroleo Brasileiro vs. Cenovus Energy |
Galenfeha vs. SMG Industries | Galenfeha vs. NXT Energy Solutions | Galenfeha vs. Dawson Geophysical | Galenfeha vs. Calfrac Well Services |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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