Correlation Between Petroleo Brasileiro and ProShares High

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

Diversification Opportunities for Petroleo Brasileiro and ProShares High

-0.42

Correlation Coefficient

Petroleo Brasileiro  ProShares High

Very good diversification

The 3 months correlation between Petroleo and ProShares is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and ProShares High YieldInterest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares High Yield 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 ProShares High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares High Yield has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and ProShares High go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and ProShares High

Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to under-perform the ProShares High. In addition to that, Petroleo Brasileiro is 13.66 times more volatile than ProShares High YieldInterest. It trades about -0.13 of its total potential returns per unit of risk. ProShares High YieldInterest is currently generating about 0.1 per unit of volatility. If you would invest  6,528  in ProShares High YieldInterest on September 20, 2024 and sell it today you would earn a total of  24.00  from holding ProShares High YieldInterest or generate 0.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Petroleo Brasileiro Petrobras  vs.  ProShares High YieldInterest

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 latest unsteady performance, the Stock's fundamental drivers remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

ProShares High Yield

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares High YieldInterest are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical indicators, ProShares High is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Petroleo Brasileiro and ProShares High

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

The idea behind Petroleo Brasileiro Petrobras and ProShares High YieldInterest 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.