Correlation Between Petroleo Brasileiro and 7GC Holdings

Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and 7GC Holdings 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 7GC Holdings 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 7GC Holdings Co, you can compare the effects of market volatilities on Petroleo Brasileiro and 7GC Holdings 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 7GC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and 7GC Holdings.

Diversification Opportunities for Petroleo Brasileiro and 7GC Holdings

-0.21

Correlation Coefficient

Petroleo Brasileiro  7GC Holdings

Very good diversification

The 3 months correlation between Petroleo and 7GC is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and 7GC Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 7GC Holdings 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 7GC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 7GC Holdings has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and 7GC Holdings go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and 7GC Holdings

If you would invest  1,047  in 7GC Holdings Co on September 29, 2024 and sell it today you would earn a total of  0.00  from holding 7GC Holdings Co or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

Petroleo Brasileiro Petrobras  vs.  7GC Holdings Co

Petroleo Brasileiro

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Petroleo Brasileiro Petrobras has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

7GC Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 7GC Holdings Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, 7GC Holdings is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Petroleo Brasileiro and 7GC Holdings

The main advantage of trading using opposite Petroleo Brasileiro and 7GC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, 7GC Holdings 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 7GC Holdings will offset losses from the drop in 7GC Holdings' long position.

The idea behind Petroleo Brasileiro Petrobras and 7GC Holdings Co 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.