Correlation Between Petroleo Brasileiro and KINDER
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By analyzing existing cross correlation between Petroleo Brasileiro Petrobras and KINDER MORGAN ENERGY, you can compare the effects of market volatilities on Petroleo Brasileiro and KINDER 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 KINDER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and KINDER.
Diversification Opportunities for Petroleo Brasileiro and KINDER
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Petroleo and KINDER is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and KINDER MORGAN ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KINDER MORGAN ENERGY 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 KINDER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KINDER MORGAN ENERGY has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and KINDER go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and KINDER
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to under-perform the KINDER. In addition to that, Petroleo Brasileiro is 2.09 times more volatile than KINDER MORGAN ENERGY. It trades about -0.24 of its total potential returns per unit of risk. KINDER MORGAN ENERGY is currently generating about 0.13 per unit of volatility. If you would invest 10,579 in KINDER MORGAN ENERGY on September 23, 2024 and sell it today you would earn a total of 189.00 from holding KINDER MORGAN ENERGY or generate 1.79% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 76.19% |
Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. KINDER MORGAN ENERGY
Performance |
Timeline |
Petroleo Brasileiro |
KINDER MORGAN ENERGY |
Petroleo Brasileiro and KINDER Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Petroleo Brasileiro and KINDER
The main advantage of trading using opposite Petroleo Brasileiro and KINDER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, KINDER 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 KINDER will offset losses from the drop in KINDER's long position.Petroleo Brasileiro vs. Shell PLC ADR | Petroleo Brasileiro vs. Suncor Energy | Petroleo Brasileiro vs. Equinor ASA ADR | Petroleo Brasileiro vs. Cenovus Energy |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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