Correlation Between Petroleo Brasileiro and Gtsi Corp

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

Diversification Opportunities for Petroleo Brasileiro and Gtsi Corp

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Correlation Coefficient

Petroleo Brasileiro  Gtsi Corp

Pay attention - limited upside

The 3 months correlation between Petroleo and Gtsi is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Gtsi Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gtsi Corp 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 Gtsi Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gtsi Corp has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Gtsi Corp go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and Gtsi Corp

If you would invest (100.00) in Gtsi Corp on September 17, 2024 and sell it today you would earn a total of  100.00  from holding Gtsi Corp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Petroleo Brasileiro Petrobras  vs.  Gtsi Corp

Petroleo Brasileiro

Risk-Adjusted Performance

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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.

Gtsi Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gtsi Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Gtsi Corp is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Petroleo Brasileiro and Gtsi Corp

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

The idea behind Petroleo Brasileiro Petrobras and Gtsi Corp 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.