Correlation Between Petroleo Brasileiro and Eco Growth

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Eco Growth 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 Eco Growth 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 Eco Growth Strategies, you can compare the effects of market volatilities on Petroleo Brasileiro and Eco Growth 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 Eco Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Eco Growth.

Diversification Opportunities for Petroleo Brasileiro and Eco Growth

0.24
  Correlation Coefficient

Modest diversification

The 3 months correlation between Petroleo and Eco is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Eco Growth Strategies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eco Growth Strategies 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 Eco Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eco Growth Strategies has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Eco Growth go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and Eco Growth

Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to under-perform the Eco Growth. But the stock apears to be less risky and, when comparing its historical volatility, Petroleo Brasileiro Petrobras is 14.87 times less risky than Eco Growth. The stock trades about -0.05 of its potential returns per unit of risk. The Eco Growth Strategies is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  16.00  in Eco Growth Strategies on September 18, 2024 and sell it today you would lose (12.00) from holding Eco Growth Strategies or give up 75.0% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Petroleo Brasileiro Petrobras  vs.  Eco Growth Strategies

 Performance 
       Timeline  
Petroleo Brasileiro 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
Eco Growth Strategies 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Eco Growth Strategies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively inconsistent technical and fundamental indicators, Eco Growth may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Petroleo Brasileiro and Eco Growth Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Petroleo Brasileiro and Eco Growth

The main advantage of trading using opposite Petroleo Brasileiro and Eco Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Eco Growth 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 Eco Growth will offset losses from the drop in Eco Growth's long position.
The idea behind Petroleo Brasileiro Petrobras and Eco 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.
Check out your portfolio center.
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 Global Correlations module to find global opportunities by holding instruments from different markets.

Other Complementary Tools

Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Stock Screener
Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Latest Portfolios
Quick portfolio dashboard that showcases your latest portfolios