Correlation Between Petroleo Brasileiro and LEVEL
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By analyzing existing cross correlation between Petroleo Brasileiro Petrobras and LEVEL 3 FING, you can compare the effects of market volatilities on Petroleo Brasileiro and LEVEL 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 LEVEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and LEVEL.
Diversification Opportunities for Petroleo Brasileiro and LEVEL
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Petroleo and LEVEL is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and LEVEL 3 FING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LEVEL 3 FING 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 LEVEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LEVEL 3 FING has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and LEVEL go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and LEVEL
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to generate 0.23 times more return on investment than LEVEL. However, Petroleo Brasileiro Petrobras is 4.27 times less risky than LEVEL. It trades about 0.12 of its potential returns per unit of risk. LEVEL 3 FING is currently generating about -0.17 per unit of risk. If you would invest 1,275 in Petroleo Brasileiro Petrobras on December 30, 2024 and sell it today you would earn a total of 163.00 from holding Petroleo Brasileiro Petrobras or generate 12.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 69.35% |
Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. LEVEL 3 FING
Performance |
Timeline |
Petroleo Brasileiro |
LEVEL 3 FING |
Petroleo Brasileiro and LEVEL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Petroleo Brasileiro and LEVEL
The main advantage of trading using opposite Petroleo Brasileiro and LEVEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, LEVEL 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 LEVEL will offset losses from the drop in LEVEL's long position.Petroleo Brasileiro vs. BP PLC ADR | Petroleo Brasileiro vs. Shell PLC ADR | Petroleo Brasileiro vs. Suncor Energy | Petroleo Brasileiro vs. Petrleo Brasileiro SA |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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