Correlation Between Petroleo Brasileiro and Axcella Health

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro and Axcella Health 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 Axcella Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petroleo Brasileiro SA and Axcella Health, you can compare the effects of market volatilities on Petroleo Brasileiro and Axcella Health 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 Axcella Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Axcella Health.

Diversification Opportunities for Petroleo Brasileiro and Axcella Health

0.69
  Correlation Coefficient

Poor diversification

The 3 months correlation between Petroleo and Axcella is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro SA and Axcella Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcella Health 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 SA are associated (or correlated) with Axcella Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axcella Health has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Axcella Health go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and Axcella Health

Considering the 90-day investment horizon Petroleo Brasileiro SA is expected to generate 0.37 times more return on investment than Axcella Health. However, Petroleo Brasileiro SA is 2.74 times less risky than Axcella Health. It trades about -0.12 of its potential returns per unit of risk. Axcella Health is currently generating about -0.18 per unit of risk. If you would invest  1,136  in Petroleo Brasileiro SA on August 31, 2022 and sell it today you would lose (82.00)  from holding Petroleo Brasileiro SA or give up 7.22% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.24%
ValuesDaily Returns

Petroleo Brasileiro SA  vs.  Axcella Health

 Performance (%) 
       Timeline  
Petroleo Brasileiro 
Petroleo Performance
0 of 100
Over the last 90 days Petroleo Brasileiro SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with sluggish performance in the last few months, the Stock's fundamental drivers remain relatively invariable which may send shares a bit higher in December 2022. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Petroleo Price Channel

Axcella Health 
Axcella Performance
0 of 100
Over the last 90 days Axcella Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in December 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Axcella Price Channel

Petroleo Brasileiro and Axcella Health Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Petroleo Brasileiro and Axcella Health

The main advantage of trading using opposite Petroleo Brasileiro and Axcella Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Axcella Health 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 Axcella Health will offset losses from the drop in Axcella Health's long position.
Petroleo Brasileiro vs. Exxon Mobil Corp
Petroleo Brasileiro vs. PETROBRAS PN N2
Petroleo Brasileiro vs. Chevron Corp
Petroleo Brasileiro vs. Mastercard
The idea behind Petroleo Brasileiro SA and Axcella Health 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.
Axcella Health vs. Siemens Ag ADR
Axcella Health vs. Regeneron Pharmaceuticals
Axcella Health vs. Vertex Pharmaceutic
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

Other Complementary Tools

Equity Valuation
Check real value of public entities based on technical and fundamental data
Go
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Go
Analyst Recommendations
Analyst recommendations and target price estimates broken down by several categories
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Go
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Go
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Go