Correlation Between Petroleo Brasileiro and Pea Verde

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

Diversification Opportunities for Petroleo Brasileiro and Pea Verde

0.0

Correlation Coefficient

Petroleo Brasileiro  Pea Verde

Pay attention - limited upside

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

Pair Corralation between Petroleo Brasileiro and Pea Verde

If you would invest  625.00  in Pea Verde SAB on September 27, 2024 and sell it today you would earn a total of  0.00  from holding Pea Verde SAB or generate 0.0% return on investment over 90 days.

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

Petroleo Brasileiro Petrobras  vs.  Pea Verde SAB

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.

Pea Verde SAB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pea Verde SAB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, Pea Verde is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Petroleo Brasileiro and Pea Verde

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

The idea behind Petroleo Brasileiro Petrobras and Pea Verde SAB 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.