Correlation Between Petroleo Brasileiro and Multi Manager

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

Diversification Opportunities for Petroleo Brasileiro and Multi Manager

-0.25

Correlation Coefficient

Petroleo Brasileiro  Multi Manager

Very good diversification

The 3 months correlation between Petroleo and Multi is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Multi Manager Growth Strategie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Manager Growth 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 Multi Manager. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Manager Growth has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Multi Manager go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and Multi Manager

Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to under-perform the Multi Manager. In addition to that, Petroleo Brasileiro is 1.28 times more volatile than Multi Manager Growth Strategies. It trades about -0.01 of its total potential returns per unit of risk. Multi Manager Growth Strategies is currently generating about 0.05 per unit of volatility. If you would invest  1,969  in Multi Manager Growth Strategies on September 27, 2024 and sell it today you would earn a total of  164.00  from holding Multi Manager Growth Strategies or generate 8.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Petroleo Brasileiro Petrobras  vs.  Multi Manager Growth Strategie

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.

Multi Manager Growth

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Multi Manager Growth Strategies are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Multi Manager 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 Multi Manager

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

The idea behind Petroleo Brasileiro Petrobras and Multi Manager Growth Strategies 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.