Correlation Between Petroleo Brasileiro and Allianzgi Nfj

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

Diversification Opportunities for Petroleo Brasileiro and Allianzgi Nfj

0.35

Correlation Coefficient

Petroleo Brasileiro  Allianzgi Nfj

Weak diversification

The 3 months correlation between Petroleo and Allianzgi is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Allianzgi Nfj Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Nfj Large 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 Allianzgi Nfj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Nfj Large has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Allianzgi Nfj go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and Allianzgi Nfj

Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to under-perform the Allianzgi Nfj. In addition to that, Petroleo Brasileiro is 2.23 times more volatile than Allianzgi Nfj Large Cap. It trades about -0.01 of its total potential returns per unit of risk. Allianzgi Nfj Large Cap is currently generating about 0.05 per unit of volatility. If you would invest  2,708  in Allianzgi Nfj Large Cap on September 30, 2024 and sell it today you would earn a total of  114.00  from holding Allianzgi Nfj Large Cap or generate 4.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Petroleo Brasileiro Petrobras  vs.  Allianzgi Nfj Large Cap

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.

Allianzgi Nfj Large

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Allianzgi Nfj Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Allianzgi Nfj 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 Allianzgi Nfj

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

The idea behind Petroleo Brasileiro Petrobras and Allianzgi Nfj Large Cap 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.