Correlation Between Petroleo Brasileiro and Kopernik Global
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Kopernik Global 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 Kopernik Global 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 Kopernik Global All Cap, you can compare the effects of market volatilities on Petroleo Brasileiro and Kopernik Global 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 Kopernik Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Kopernik Global.
Diversification Opportunities for Petroleo Brasileiro and Kopernik Global
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Petroleo and Kopernik is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Kopernik Global All Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kopernik Global All 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 Kopernik Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kopernik Global All has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Kopernik Global go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Kopernik Global
Considering the 90-day investment horizon Petroleo Brasileiro is expected to generate 1.11 times less return on investment than Kopernik Global. In addition to that, Petroleo Brasileiro is 2.23 times more volatile than Kopernik Global All Cap. It trades about 0.13 of its total potential returns per unit of risk. Kopernik Global All Cap is currently generating about 0.31 per unit of volatility. If you would invest 1,102 in Kopernik Global All Cap on December 29, 2024 and sell it today you would earn a total of 171.00 from holding Kopernik Global All Cap or generate 15.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.39% |
Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. Kopernik Global All Cap
Performance |
Timeline |
Petroleo Brasileiro |
Kopernik Global All |
Petroleo Brasileiro and Kopernik Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Petroleo Brasileiro and Kopernik Global
The main advantage of trading using opposite Petroleo Brasileiro and Kopernik Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Kopernik Global 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 Kopernik Global will offset losses from the drop in Kopernik Global'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 |
Kopernik Global vs. Fdzbpx | Kopernik Global vs. Iaadx | Kopernik Global vs. Arrow Managed Futures | Kopernik Global vs. Ftufox |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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