Correlation Between Petroleo Brasileiro and Jhancock Mgd

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

Diversification Opportunities for Petroleo Brasileiro and Jhancock Mgd

0.7

Correlation Coefficient

Petroleo Brasileiro  Jhancock Mgd

Poor diversification

The 3 months correlation between Petroleo and Jhancock is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Jhancock Mgd Acct in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Mgd Acct 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 Jhancock Mgd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Mgd Acct has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Jhancock Mgd go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and Jhancock Mgd

Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to under-perform the Jhancock Mgd. In addition to that, Petroleo Brasileiro is 6.44 times more volatile than Jhancock Mgd Acct. It trades about -0.01 of its total potential returns per unit of risk. Jhancock Mgd Acct is currently generating about 0.0 per unit of volatility. If you would invest  1,018  in Jhancock Mgd Acct on September 22, 2024 and sell it today you would earn a total of  1.00  from holding Jhancock Mgd Acct or generate 0.1% return on investment over 90 days.

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

Petroleo Brasileiro Petrobras  vs.  Jhancock Mgd Acct

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 recent stock price agitation, may contribute to short-term losses for the retail investors.

Jhancock Mgd Acct

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jhancock Mgd Acct has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Jhancock Mgd is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Petroleo Brasileiro and Jhancock Mgd

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

The idea behind Petroleo Brasileiro Petrobras and Jhancock Mgd Acct 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.