Correlation Between Petroleo Brasileiro and EXPEDIA
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By analyzing existing cross correlation between Petroleo Brasileiro Petrobras and EXPEDIA GROUP INC, you can compare the effects of market volatilities on Petroleo Brasileiro and EXPEDIA 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 EXPEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and EXPEDIA.
Diversification Opportunities for Petroleo Brasileiro and EXPEDIA
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Petroleo and EXPEDIA is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and EXPEDIA GROUP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EXPEDIA GROUP INC 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 EXPEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EXPEDIA GROUP INC has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and EXPEDIA go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and EXPEDIA
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to generate 3.26 times more return on investment than EXPEDIA. However, Petroleo Brasileiro is 3.26 times more volatile than EXPEDIA GROUP INC. It trades about -0.03 of its potential returns per unit of risk. EXPEDIA GROUP INC is currently generating about -0.15 per unit of risk. If you would invest 1,423 in Petroleo Brasileiro Petrobras on September 15, 2024 and sell it today you would lose (50.00) from holding Petroleo Brasileiro Petrobras or give up 3.51% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 96.88% |
Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. EXPEDIA GROUP INC
Performance |
Timeline |
Petroleo Brasileiro |
EXPEDIA GROUP INC |
Petroleo Brasileiro and EXPEDIA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Petroleo Brasileiro and EXPEDIA
The main advantage of trading using opposite Petroleo Brasileiro and EXPEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, EXPEDIA 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 EXPEDIA will offset losses from the drop in EXPEDIA's long position.Petroleo Brasileiro vs. Ecopetrol SA ADR | Petroleo Brasileiro vs. Equinor ASA ADR | Petroleo Brasileiro vs. Eni SpA ADR | Petroleo Brasileiro vs. Cenovus Energy |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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