Correlation Between Positivo Tecnologia and Refinaria

Can any of the company-specific risk be diversified away by investing in both Positivo Tecnologia and Refinaria 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 Positivo Tecnologia and Refinaria into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Positivo Tecnologia SA and Refinaria de Petrleos, you can compare the effects of market volatilities on Positivo Tecnologia and Refinaria 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 Positivo Tecnologia with a short position of Refinaria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Positivo Tecnologia and Refinaria.

Diversification Opportunities for Positivo Tecnologia and Refinaria

0.48

Correlation Coefficient

Positivo Tecnologia  Refinaria

Very weak diversification

The 3 months correlation between Positivo and Refinaria is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Positivo Tecnologia SA and Refinaria de Petrleos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Refinaria de Petrleos and Positivo Tecnologia 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 Positivo Tecnologia SA are associated (or correlated) with Refinaria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Refinaria de Petrleos has no effect on the direction of Positivo Tecnologia i.e., Positivo Tecnologia and Refinaria go up and down completely randomly.

Pair Corralation between Positivo Tecnologia and Refinaria

Assuming the 90 days trading horizon Positivo Tecnologia SA is expected to under-perform the Refinaria. In addition to that, Positivo Tecnologia is 1.13 times more volatile than Refinaria de Petrleos. It trades about -0.04 of its total potential returns per unit of risk. Refinaria de Petrleos is currently generating about -0.02 per unit of volatility. If you would invest  289.00  in Refinaria de Petrleos on September 12, 2024 and sell it today you would lose (17.00) from holding Refinaria de Petrleos or give up 5.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Positivo Tecnologia SA  vs.  Refinaria de Petrleos

Positivo Tecnologia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Positivo Tecnologia SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Refinaria de Petrleos

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Refinaria de Petrleos has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Refinaria is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Positivo Tecnologia and Refinaria

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

The idea behind Positivo Tecnologia SA and Refinaria de Petrleos 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.