Correlation Between Petroleo Brasileiro and NewtekOne, 850

Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and NewtekOne, 850 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 NewtekOne, 850 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 NewtekOne, 850 percent, you can compare the effects of market volatilities on Petroleo Brasileiro and NewtekOne, 850 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 NewtekOne, 850. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and NewtekOne, 850.

Diversification Opportunities for Petroleo Brasileiro and NewtekOne, 850

-0.28

Correlation Coefficient

Petroleo Brasileiro  NewtekOne, 850

Very good diversification

The 3 months correlation between Petroleo and NewtekOne, is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and NewtekOne, 850 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewtekOne, 850 percent 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 NewtekOne, 850. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewtekOne, 850 percent has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and NewtekOne, 850 go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and NewtekOne, 850

Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to generate 6.44 times more return on investment than NewtekOne, 850. However, Petroleo Brasileiro is 6.44 times more volatile than NewtekOne, 850 percent. It trades about 0.07 of its potential returns per unit of risk. NewtekOne, 850 percent is currently generating about 0.08 per unit of risk. If you would invest  762.00  in Petroleo Brasileiro Petrobras on September 14, 2024 and sell it today you would earn a total of  599.00  from holding Petroleo Brasileiro Petrobras or generate 78.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	27.68%
Values	Daily Returns

Petroleo Brasileiro Petrobras  vs.  NewtekOne, 850 percent

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.

NewtekOne, 850 percent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NewtekOne, 850 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, NewtekOne, 850 is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Petroleo Brasileiro and NewtekOne, 850

The main advantage of trading using opposite Petroleo Brasileiro and NewtekOne, 850 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, NewtekOne, 850 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 NewtekOne, 850 will offset losses from the drop in NewtekOne, 850's long position.

The idea behind Petroleo Brasileiro Petrobras and NewtekOne, 850 percent 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.