Correlation Between Petroleo Brasileiro and ODIN NORSK

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

Diversification Opportunities for Petroleo Brasileiro and ODIN NORSK

-0.44

Correlation Coefficient

Petroleo Brasileiro  ODIN NORSK

Very good diversification

The 3 months correlation between Petroleo and ODIN is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and ODIN NORSK OBLIGASJON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ODIN NORSK OBLIGASJON 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 ODIN NORSK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ODIN NORSK OBLIGASJON has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and ODIN NORSK go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and ODIN NORSK

Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to under-perform the ODIN NORSK. In addition to that, Petroleo Brasileiro is 84.47 times more volatile than ODIN NORSK OBLIGASJON. It trades about -0.05 of its total potential returns per unit of risk. ODIN NORSK OBLIGASJON is currently generating about 0.97 per unit of volatility. If you would invest  109,891  in ODIN NORSK OBLIGASJON on September 18, 2024 and sell it today you would earn a total of  1,236  from holding ODIN NORSK OBLIGASJON or generate 1.12% return on investment over 90 days.

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

Petroleo Brasileiro Petrobras  vs.  ODIN NORSK OBLIGASJON

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 latest stock price agitation, may contribute to short-term losses for the retail investors.

ODIN NORSK OBLIGASJON

Risk-Adjusted Performance

76 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in ODIN NORSK OBLIGASJON are ranked lower than 76 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, ODIN NORSK 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 ODIN NORSK

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

The idea behind Petroleo Brasileiro Petrobras and ODIN NORSK OBLIGASJON 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.