Correlation Between Petroleo Brasileiro and 674599DX0

Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and 674599DX0 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 674599DX0 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 OXY 75 01 NOV 96, you can compare the effects of market volatilities on Petroleo Brasileiro and 674599DX0 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 674599DX0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and 674599DX0.

Diversification Opportunities for Petroleo Brasileiro and 674599DX0

-0.68

Correlation Coefficient

Petroleo Brasileiro  674599DX0

Excellent diversification

The 3 months correlation between Petroleo and 674599DX0 is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and OXY 75 01 NOV 96 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OXY 75 01 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 674599DX0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OXY 75 01 has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and 674599DX0 go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and 674599DX0

Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to generate 0.94 times more return on investment than 674599DX0. However, Petroleo Brasileiro Petrobras is 1.06 times less risky than 674599DX0. It trades about 0.03 of its potential returns per unit of risk. OXY 75 01 NOV 96 is currently generating about -0.19 per unit of risk. If you would invest  1,303  in Petroleo Brasileiro Petrobras on December 4, 2024 and sell it today you would earn a total of  32.00  from holding Petroleo Brasileiro Petrobras or generate 2.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	25.42%
Values	Daily Returns

Petroleo Brasileiro Petrobras  vs.  OXY 75 01 NOV 96

Petroleo Brasileiro

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Petroleo Brasileiro Petrobras are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

OXY 75 01

Risk-Adjusted Performance

Very Weak

Over the last 90 days OXY 75 01 NOV 96 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for OXY 75 01 NOV 96 investors.

Pair Trading with Petroleo Brasileiro and 674599DX0

The main advantage of trading using opposite Petroleo Brasileiro and 674599DX0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, 674599DX0 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 674599DX0 will offset losses from the drop in 674599DX0's long position.

The idea behind Petroleo Brasileiro Petrobras and OXY 75 01 NOV 96 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.