Correlation Between Petroleo Brasileiro and Inari Amertron

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

Diversification Opportunities for Petroleo Brasileiro and Inari Amertron

-0.12

Correlation Coefficient

Petroleo Brasileiro  Inari Amertron

Good diversification

The 3 months correlation between Petroleo and Inari is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Inari Amertron Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inari Amertron Bhd 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 Inari Amertron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inari Amertron Bhd has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Inari Amertron go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and Inari Amertron

Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to generate 1.06 times more return on investment than Inari Amertron. However, Petroleo Brasileiro is 1.06 times more volatile than Inari Amertron Bhd. It trades about 0.08 of its potential returns per unit of risk. Inari Amertron Bhd is currently generating about 0.03 per unit of risk. If you would invest  642.00  in Petroleo Brasileiro Petrobras on September 24, 2024 and sell it today you would earn a total of  662.00  from holding Petroleo Brasileiro Petrobras or generate 103.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.79%
Values	Daily Returns

Petroleo Brasileiro Petrobras  vs.  Inari Amertron Bhd

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 latest unsteady performance, the Stock's fundamental drivers remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Inari Amertron Bhd

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Inari Amertron Bhd are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Inari Amertron is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Petroleo Brasileiro and Inari Amertron

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

The idea behind Petroleo Brasileiro Petrobras and Inari Amertron Bhd 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.