Correlation Between Petroleo Brasileiro and Immunic

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

Diversification Opportunities for Petroleo Brasileiro and Immunic

0.39

Correlation Coefficient

Petroleo Brasileiro  Immunic

Weak diversification

The 3 months correlation between Petroleo and Immunic is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Immunic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immunic 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 Immunic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immunic has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Immunic go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and Immunic

Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to under-perform the Immunic. But the stock apears to be less risky and, when comparing its historical volatility, Petroleo Brasileiro Petrobras is 2.68 times less risky than Immunic. The stock trades about -0.01 of its potential returns per unit of risk. The Immunic is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  125.00  in Immunic on October 7, 2024 and sell it today you would lose (15.00) from holding Immunic or give up 12.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Petroleo Brasileiro Petrobras  vs.  Immunic

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 unfluctuating 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.

Immunic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Immunic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Petroleo Brasileiro and Immunic

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

The idea behind Petroleo Brasileiro Petrobras and Immunic 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.