Correlation Between Petroleo Brasileiro and Loomis Sayles

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

Diversification Opportunities for Petroleo Brasileiro and Loomis Sayles

-0.14

Correlation Coefficient

Petroleo Brasileiro  Loomis Sayles

Good diversification

The 3 months correlation between Petroleo and Loomis is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Loomis Sayles Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loomis Sayles Small 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 Loomis Sayles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loomis Sayles Small has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Loomis Sayles go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and Loomis Sayles

Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to generate 1.02 times more return on investment than Loomis Sayles. However, Petroleo Brasileiro is 1.02 times more volatile than Loomis Sayles Small. It trades about 0.13 of its potential returns per unit of risk. Loomis Sayles Small is currently generating about -0.14 per unit of risk. If you would invest  1,262  in Petroleo Brasileiro Petrobras on December 26, 2024 and sell it today you would earn a total of  165.00  from holding Petroleo Brasileiro Petrobras or generate 13.07% return on investment over 90 days.

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

Petroleo Brasileiro Petrobras  vs.  Loomis Sayles Small

Petroleo Brasileiro

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Petroleo Brasileiro Petrobras are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental drivers, Petroleo Brasileiro reported solid returns over the last few months and may actually be approaching a breakup point.

Loomis Sayles Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Loomis Sayles Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Petroleo Brasileiro and Loomis Sayles

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

The idea behind Petroleo Brasileiro Petrobras and Loomis Sayles Small 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.