Correlation Between OSX Brasil and Refinaria

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

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

Diversification Opportunities for OSX Brasil and Refinaria

0.2

Correlation Coefficient

OSX Brasil  Refinaria

Modest diversification

The 3 months correlation between OSX and Refinaria is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding OSX Brasil 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 OSX Brasil 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 OSX Brasil 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 OSX Brasil i.e., OSX Brasil and Refinaria go up and down completely randomly.

Pair Corralation between OSX Brasil and Refinaria

Assuming the 90 days trading horizon OSX Brasil SA is expected to generate 1.07 times more return on investment than Refinaria. However, OSX Brasil is 1.07 times more volatile than Refinaria de Petrleos. It trades about -0.02 of its potential returns per unit of risk. Refinaria de Petrleos is currently generating about -0.08 per unit of risk. If you would invest  404.00  in OSX Brasil SA on September 13, 2024 and sell it today you would lose (29.00) from holding OSX Brasil SA or give up 7.18% of portfolio value over 90 days.

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

OSX Brasil SA  vs.  Refinaria de Petrleos

OSX Brasil SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OSX Brasil SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, OSX Brasil is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the 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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with OSX Brasil and Refinaria

The main advantage of trading using opposite OSX Brasil and Refinaria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OSX Brasil 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 OSX Brasil 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.