Correlation Between Petroleo Brasileiro and Takung Art

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

Diversification Opportunities for Petroleo Brasileiro and Takung Art

0.51

Correlation Coefficient

Petroleo Brasileiro  Takung Art

Very weak diversification

The 3 months correlation between Petroleo and Takung is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Takung Art Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Takung Art 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 Takung Art. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Takung Art has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Takung Art go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and Takung Art

If you would invest  23.00  in Takung Art Co on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Takung Art Co or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

Petroleo Brasileiro Petrobras  vs.  Takung Art Co

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.

Takung Art

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Takung Art Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Takung Art is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Petroleo Brasileiro and Takung Art

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

The idea behind Petroleo Brasileiro Petrobras and Takung Art Co 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.