Correlation Between Petroleo Brasileiro and Bancor Network

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

Diversification Opportunities for Petroleo Brasileiro and Bancor Network

0.55
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Petroleo and Bancor is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Bancor Network Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bancor Network Token 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 Bancor Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bancor Network Token has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Bancor Network go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and Bancor Network

Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to generate 0.63 times more return on investment than Bancor Network. However, Petroleo Brasileiro Petrobras is 1.58 times less risky than Bancor Network. It trades about 0.06 of its potential returns per unit of risk. Bancor Network Token is currently generating about -0.15 per unit of risk. If you would invest  565.00  in Petroleo Brasileiro Petrobras on September 9, 2022 and sell it today you would earn a total of  529.50  from holding Petroleo Brasileiro Petrobras or generate 93.72% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy59.56%
ValuesDaily Returns

Petroleo Brasileiro Petrobras  vs.  Bancor Network Token

 Performance (%) 
       Timeline  
Petroleo Brasileiro 
Petroleo Performance
0 of 100
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.

Petroleo Price Channel

Bancor Network Token 
Bancor Performance
0 of 100
Over the last 90 days Bancor Network Token has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Crypto's basic indicators remain somewhat strong which may send shares a bit higher in January 2023. The current disturbance may also be a sign of long term up-swing for Bancor Network Token investors.

Bancor Price Channel

Petroleo Brasileiro and Bancor Network Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Petroleo Brasileiro and Bancor Network

The main advantage of trading using opposite Petroleo Brasileiro and Bancor Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Bancor Network 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 Bancor Network will offset losses from the drop in Bancor Network's long position.
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The idea behind Petroleo Brasileiro Petrobras and Bancor Network Token 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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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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