Correlation Between Petroleo Brasileiro and Evaxion Biotech
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Evaxion Biotech 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 Evaxion Biotech 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 Evaxion Biotech AS, you can compare the effects of market volatilities on Petroleo Brasileiro and Evaxion Biotech 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 Evaxion Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Evaxion Biotech.
Diversification Opportunities for Petroleo Brasileiro and Evaxion Biotech
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Petroleo and Evaxion is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Evaxion Biotech AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evaxion Biotech AS 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 Evaxion Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evaxion Biotech AS has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Evaxion Biotech go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Evaxion Biotech
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to generate 0.25 times more return on investment than Evaxion Biotech. However, Petroleo Brasileiro Petrobras is 4.01 times less risky than Evaxion Biotech. It trades about 0.07 of its potential returns per unit of risk. Evaxion Biotech AS is currently generating about -0.03 per unit of risk. If you would invest 762.00 in Petroleo Brasileiro Petrobras on September 14, 2024 and sell it today you would earn a total of 599.00 from holding Petroleo Brasileiro Petrobras or generate 78.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. Evaxion Biotech AS
Performance |
Timeline |
Petroleo Brasileiro |
Evaxion Biotech AS |
Petroleo Brasileiro and Evaxion Biotech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Petroleo Brasileiro and Evaxion Biotech
The main advantage of trading using opposite Petroleo Brasileiro and Evaxion Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Evaxion Biotech 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 Evaxion Biotech will offset losses from the drop in Evaxion Biotech's long position.Petroleo Brasileiro vs. Ecopetrol SA ADR | Petroleo Brasileiro vs. Equinor ASA ADR | Petroleo Brasileiro vs. Eni SpA ADR | Petroleo Brasileiro vs. Cenovus Energy |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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