Correlation Between Petroleo Brasileiro and OSRAM LICHT
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and OSRAM LICHT 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 OSRAM LICHT 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 OSRAM LICHT N, you can compare the effects of market volatilities on Petroleo Brasileiro and OSRAM LICHT 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 OSRAM LICHT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and OSRAM LICHT.
Diversification Opportunities for Petroleo Brasileiro and OSRAM LICHT
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Petroleo and OSRAM is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and OSRAM LICHT N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OSRAM LICHT N 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 OSRAM LICHT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OSRAM LICHT N has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and OSRAM LICHT go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and OSRAM LICHT
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to under-perform the OSRAM LICHT. In addition to that, Petroleo Brasileiro is 6.34 times more volatile than OSRAM LICHT N. It trades about -0.24 of its total potential returns per unit of risk. OSRAM LICHT N is currently generating about 0.12 per unit of volatility. If you would invest 5,140 in OSRAM LICHT N on September 23, 2024 and sell it today you would earn a total of 40.00 from holding OSRAM LICHT N or generate 0.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. OSRAM LICHT N
Performance |
Timeline |
Petroleo Brasileiro |
OSRAM LICHT N |
Petroleo Brasileiro and OSRAM LICHT Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Petroleo Brasileiro and OSRAM LICHT
The main advantage of trading using opposite Petroleo Brasileiro and OSRAM LICHT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, OSRAM LICHT 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 OSRAM LICHT will offset losses from the drop in OSRAM LICHT's long position.Petroleo Brasileiro vs. Shell PLC ADR | Petroleo Brasileiro vs. Suncor Energy | Petroleo Brasileiro vs. Equinor ASA ADR | Petroleo Brasileiro vs. Cenovus Energy |
OSRAM LICHT vs. Delta Electronics Public | OSRAM LICHT vs. YASKAWA ELEC UNSP | OSRAM LICHT vs. Plug Power | OSRAM LICHT vs. VERTIV HOLCL A |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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