Correlation Between Petroleo Brasileiro and Calamos Market

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

Diversification Opportunities for Petroleo Brasileiro and Calamos Market

-0.39

Correlation Coefficient

Petroleo Brasileiro  Calamos Market

Very good diversification

The 3 months correlation between Petroleo and Calamos is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Calamos Market Neutral in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Market Neutral 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 Calamos Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Market Neutral has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Calamos Market go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and Calamos Market

Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to under-perform the Calamos Market. In addition to that, Petroleo Brasileiro is 16.13 times more volatile than Calamos Market Neutral. It trades about -0.06 of its total potential returns per unit of risk. Calamos Market Neutral is currently generating about 0.3 per unit of volatility. If you would invest  1,482  in Calamos Market Neutral on September 17, 2024 and sell it today you would earn a total of  27.00  from holding Calamos Market Neutral or generate 1.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Petroleo Brasileiro Petrobras  vs.  Calamos Market Neutral

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.

Calamos Market Neutral

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Calamos Market Neutral are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Calamos Market is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Petroleo Brasileiro and Calamos Market

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

The idea behind Petroleo Brasileiro Petrobras and Calamos Market Neutral 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.