Correlation Between Petroleo Brasileiro and PhenixFIN 525

Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and PhenixFIN 525 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 PhenixFIN 525 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 PhenixFIN 525, you can compare the effects of market volatilities on Petroleo Brasileiro and PhenixFIN 525 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 PhenixFIN 525. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and PhenixFIN 525.

Diversification Opportunities for Petroleo Brasileiro and PhenixFIN 525

-0.44

Correlation Coefficient

Petroleo Brasileiro  PhenixFIN 525

Very good diversification

The 3 months correlation between Petroleo and PhenixFIN is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and PhenixFIN 525 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PhenixFIN 525 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 PhenixFIN 525. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PhenixFIN 525 has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and PhenixFIN 525 go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and PhenixFIN 525

Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to under-perform the PhenixFIN 525. In addition to that, Petroleo Brasileiro is 3.28 times more volatile than PhenixFIN 525. It trades about -0.01 of its total potential returns per unit of risk. PhenixFIN 525 is currently generating about 0.04 per unit of volatility. If you would invest  2,257  in PhenixFIN 525 on October 13, 2024 and sell it today you would earn a total of  24.00  from holding PhenixFIN 525 or generate 1.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Petroleo Brasileiro Petrobras  vs.  PhenixFIN 525

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.

PhenixFIN 525

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PhenixFIN 525 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, PhenixFIN 525 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Petroleo Brasileiro and PhenixFIN 525

The main advantage of trading using opposite Petroleo Brasileiro and PhenixFIN 525 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, PhenixFIN 525 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 PhenixFIN 525 will offset losses from the drop in PhenixFIN 525's long position.

The idea behind Petroleo Brasileiro Petrobras and PhenixFIN 525 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.