Correlation Between Petroleo Brasileiro and FNB ETN

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

Diversification Opportunities for Petroleo Brasileiro and FNB ETN

0.14

Correlation Coefficient

Petroleo Brasileiro  FNB ETN

Average diversification

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

Pair Corralation between Petroleo Brasileiro and FNB ETN

Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to generate 1.23 times more return on investment than FNB ETN. However, Petroleo Brasileiro is 1.23 times more volatile than FNB ETN on. It trades about 0.43 of its potential returns per unit of risk. FNB ETN on is currently generating about -0.03 per unit of risk. If you would invest  1,249  in Petroleo Brasileiro Petrobras on October 20, 2024 and sell it today you would earn a total of  123.00  from holding Petroleo Brasileiro Petrobras or generate 9.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Petroleo Brasileiro Petrobras  vs.  FNB ETN on

Petroleo Brasileiro

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Petroleo Brasileiro Petrobras are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady fundamental drivers, Petroleo Brasileiro may actually be approaching a critical reversion point that can send shares even higher in February 2025.

FNB ETN on

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FNB ETN on are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, FNB ETN may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Petroleo Brasileiro and FNB ETN

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

The idea behind Petroleo Brasileiro Petrobras and FNB ETN on 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.