Correlation Between Petroleo Brasileiro and Gryphon Digital

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

Diversification Opportunities for Petroleo Brasileiro and Gryphon Digital

-0.34

Correlation Coefficient

Petroleo Brasileiro  Gryphon Digital

Very good diversification

The 3 months correlation between Petroleo and Gryphon is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Gryphon Digital Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gryphon Digital Mining 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 Gryphon Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gryphon Digital Mining has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Gryphon Digital go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and Gryphon Digital

Considering the 90-day investment horizon Petroleo Brasileiro is expected to generate 27.55 times less return on investment than Gryphon Digital. But when comparing it to its historical volatility, Petroleo Brasileiro Petrobras is 5.64 times less risky than Gryphon Digital. It trades about 0.02 of its potential returns per unit of risk. Gryphon Digital Mining is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  45.00  in Gryphon Digital Mining on September 12, 2024 and sell it today you would earn a total of  14.50  from holding Gryphon Digital Mining or generate 32.22% 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.  Gryphon Digital Mining

Petroleo Brasileiro

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Petroleo Brasileiro Petrobras are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental drivers, Petroleo Brasileiro is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Gryphon Digital Mining

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gryphon Digital Mining are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Gryphon Digital reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Petroleo Brasileiro and Gryphon Digital

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

The idea behind Petroleo Brasileiro Petrobras and Gryphon Digital Mining 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 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..