Correlation Between Petroleo Brasileiro and BIORA THERAPEUTNEW

Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and BIORA THERAPEUTNEW 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 BIORA THERAPEUTNEW 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 BIORA THERAPEUTNEW 001, you can compare the effects of market volatilities on Petroleo Brasileiro and BIORA THERAPEUTNEW 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 BIORA THERAPEUTNEW. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and BIORA THERAPEUTNEW.

Diversification Opportunities for Petroleo Brasileiro and BIORA THERAPEUTNEW

-0.58

Correlation Coefficient

Petroleo Brasileiro  BIORA THERAPEUTNEW

Excellent diversification

The 3 months correlation between Petroleo and BIORA is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and BIORA THERAPEUTNEW 001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIORA THERAPEUTNEW 001 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 BIORA THERAPEUTNEW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIORA THERAPEUTNEW 001 has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and BIORA THERAPEUTNEW go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and BIORA THERAPEUTNEW

Considering the 90-day investment horizon Petroleo Brasileiro is expected to generate 9.71 times less return on investment than BIORA THERAPEUTNEW. But when comparing it to its historical volatility, Petroleo Brasileiro Petrobras is 22.05 times less risky than BIORA THERAPEUTNEW. It trades about 0.07 of its potential returns per unit of risk. BIORA THERAPEUTNEW 001 is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  622.00  in BIORA THERAPEUTNEW 001 on September 28, 2024 and sell it today you would lose (112.00) from holding BIORA THERAPEUTNEW 001 or give up 18.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.2%
Values	Daily Returns

Petroleo Brasileiro Petrobras  vs.  BIORA THERAPEUTNEW 001

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.

BIORA THERAPEUTNEW 001

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days BIORA THERAPEUTNEW 001 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, BIORA THERAPEUTNEW reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Petroleo Brasileiro and BIORA THERAPEUTNEW

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

The idea behind Petroleo Brasileiro Petrobras and BIORA THERAPEUTNEW 001 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.