Correlation Between Petroleo Brasileiro and Logistics Innovation

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

Diversification Opportunities for Petroleo Brasileiro and Logistics Innovation

-0.49

Correlation Coefficient

Petroleo Brasileiro  Logistics Innovation

Very good diversification

The 3 months correlation between Petroleo and Logistics is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Logistics Innovation Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logistics Innovation 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 Logistics Innovation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logistics Innovation has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Logistics Innovation go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and Logistics Innovation

If you would invest  1,024  in Logistics Innovation Technologies on September 18, 2024 and sell it today you would earn a total of  0.00  from holding Logistics Innovation Technologies or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Petroleo Brasileiro Petrobras  vs.  Logistics Innovation Technolog

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

Logistics Innovation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Logistics Innovation Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Logistics Innovation is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Petroleo Brasileiro and Logistics Innovation

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

The idea behind Petroleo Brasileiro Petrobras and Logistics Innovation Technologies 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 Commodity Directory module to find actively traded commodities issued by global exchanges.