Correlation Between Petroleo Brasileiro and HONEYWELL
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By analyzing existing cross correlation between Petroleo Brasileiro Petrobras and HONEYWELL INTERNATIONAL INC, you can compare the effects of market volatilities on Petroleo Brasileiro and HONEYWELL 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 HONEYWELL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and HONEYWELL.
Diversification Opportunities for Petroleo Brasileiro and HONEYWELL
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Petroleo and HONEYWELL is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and HONEYWELL INTERNATIONAL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HONEYWELL INTERNATIONAL 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 HONEYWELL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HONEYWELL INTERNATIONAL has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and HONEYWELL go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and HONEYWELL
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to generate 2.33 times more return on investment than HONEYWELL. However, Petroleo Brasileiro is 2.33 times more volatile than HONEYWELL INTERNATIONAL INC. It trades about -0.06 of its potential returns per unit of risk. HONEYWELL INTERNATIONAL INC is currently generating about -0.15 per unit of risk. If you would invest 1,402 in Petroleo Brasileiro Petrobras on September 23, 2024 and sell it today you would lose (98.00) from holding Petroleo Brasileiro Petrobras or give up 6.99% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 92.31% |
Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. HONEYWELL INTERNATIONAL INC
Performance |
Timeline |
Petroleo Brasileiro |
HONEYWELL INTERNATIONAL |
Petroleo Brasileiro and HONEYWELL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Petroleo Brasileiro and HONEYWELL
The main advantage of trading using opposite Petroleo Brasileiro and HONEYWELL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, HONEYWELL 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 HONEYWELL will offset losses from the drop in HONEYWELL'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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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