Correlation Between Petroleo Brasileiro and IAGLN
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By analyzing existing cross correlation between Petroleo Brasileiro Petrobras and IAGLN 425 15 NOV 32, you can compare the effects of market volatilities on Petroleo Brasileiro and IAGLN 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 IAGLN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and IAGLN.
Diversification Opportunities for Petroleo Brasileiro and IAGLN
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Petroleo and IAGLN is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and IAGLN 425 15 NOV 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IAGLN 425 15 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 IAGLN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IAGLN 425 15 has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and IAGLN go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and IAGLN
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to under-perform the IAGLN. But the stock apears to be less risky and, when comparing its historical volatility, Petroleo Brasileiro Petrobras is 1.18 times less risky than IAGLN. The stock trades about -0.06 of its potential returns per unit of risk. The IAGLN 425 15 NOV 32 is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 9,532 in IAGLN 425 15 NOV 32 on September 23, 2024 and sell it today you would lose (232.00) from holding IAGLN 425 15 NOV 32 or give up 2.43% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 33.85% |
Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. IAGLN 425 15 NOV 32
Performance |
Timeline |
Petroleo Brasileiro |
IAGLN 425 15 |
Petroleo Brasileiro and IAGLN Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Petroleo Brasileiro and IAGLN
The main advantage of trading using opposite Petroleo Brasileiro and IAGLN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, IAGLN 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 IAGLN will offset losses from the drop in IAGLN's long position.Petroleo Brasileiro vs. Shell PLC ADR | Petroleo Brasileiro vs. Suncor Energy | Petroleo Brasileiro vs. Equinor ASA ADR | Petroleo Brasileiro vs. Cenovus Energy |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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