Correlation Between Petroleo Brasileiro and Calvert Large

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

Diversification Opportunities for Petroleo Brasileiro and Calvert Large

-0.28

Correlation Coefficient

Petroleo Brasileiro  Calvert Large

Very good diversification

The 3 months correlation between Petroleo and Calvert is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Calvert Large Cap E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Large Cap 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 Calvert Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Large Cap has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Calvert Large go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and Calvert Large

Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to under-perform the Calvert Large. In addition to that, Petroleo Brasileiro is 2.18 times more volatile than Calvert Large Cap E. It trades about -0.02 of its total potential returns per unit of risk. Calvert Large Cap E is currently generating about 0.18 per unit of volatility. If you would invest  4,917  in Calvert Large Cap E on September 13, 2024 and sell it today you would earn a total of  405.00  from holding Calvert Large Cap E or generate 8.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Petroleo Brasileiro Petrobras  vs.  Calvert Large Cap E

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 recent stock price agitation, may contribute to short-term losses for the retail investors.

Calvert Large Cap

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Large Cap E are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Calvert Large may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Petroleo Brasileiro and Calvert Large

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

The idea behind Petroleo Brasileiro Petrobras and Calvert Large Cap E 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.