Correlation Between Petroleo Brasileiro and Victory Rs

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

Diversification Opportunities for Petroleo Brasileiro and Victory Rs

-0.16

Correlation Coefficient

Petroleo Brasileiro  Victory Rs

Good diversification

The 3 months correlation between Petroleo and Victory is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Victory Rs Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Rs Growth 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 Victory Rs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Rs Growth has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Victory Rs go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and Victory Rs

Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to under-perform the Victory Rs. In addition to that, Petroleo Brasileiro is 1.2 times more volatile than Victory Rs Growth. It trades about -0.02 of its total potential returns per unit of risk. Victory Rs Growth is currently generating about 0.02 per unit of volatility. If you would invest  2,868  in Victory Rs Growth on December 5, 2024 and sell it today you would earn a total of  42.00  from holding Victory Rs Growth or generate 1.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Petroleo Brasileiro Petrobras  vs.  Victory Rs Growth

Petroleo Brasileiro

Risk-Adjusted Performance

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.

Victory Rs Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days Victory Rs Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Petroleo Brasileiro and Victory Rs

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

The idea behind Petroleo Brasileiro Petrobras and Victory Rs Growth 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.