Correlation Between Petroleo Brasileiro and VanEck Polkadot

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

Diversification Opportunities for Petroleo Brasileiro and VanEck Polkadot

0.0

Correlation Coefficient

Petroleo Brasileiro  VanEck Polkadot

Pay attention - limited upside

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

Pair Corralation between Petroleo Brasileiro and VanEck Polkadot

Considering the 90-day investment horizon Petroleo Brasileiro is expected to generate 1.87 times less return on investment than VanEck Polkadot. But when comparing it to its historical volatility, Petroleo Brasileiro Petrobras is 2.4 times less risky than VanEck Polkadot. It trades about 0.07 of its potential returns per unit of risk. VanEck Polkadot ETN is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  128.00  in VanEck Polkadot ETN on September 20, 2024 and sell it today you would earn a total of  128.00  from holding VanEck Polkadot ETN or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.02%
Values	Daily Returns

Petroleo Brasileiro Petrobras  vs.  VanEck Polkadot ETN

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.

VanEck Polkadot ETN

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Polkadot ETN are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, VanEck Polkadot unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Petroleo Brasileiro and VanEck Polkadot

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

The idea behind Petroleo Brasileiro Petrobras and VanEck Polkadot ETN 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .