Correlation Between Petroleo Brasileiro and Stratis

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

Diversification Opportunities for Petroleo Brasileiro and Stratis

0.63
  Correlation Coefficient

Poor diversification

The 3 months correlation between Petroleo and Stratis is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Stratis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stratis 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 Stratis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stratis has no effect on the direction of Petroleo Brasileiro i.e., Petroleo Brasileiro and Stratis go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and Stratis

Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to generate 0.4 times more return on investment than Stratis. However, Petroleo Brasileiro Petrobras is 2.48 times less risky than Stratis. It trades about 0.06 of its potential returns per unit of risk. Stratis is currently generating about -0.03 per unit of risk. If you would invest  545.00  in Petroleo Brasileiro Petrobras on September 8, 2022 and sell it today you would earn a total of  563.00  from holding Petroleo Brasileiro Petrobras or generate 103.3% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy62.26%
ValuesDaily Returns

Petroleo Brasileiro Petrobras  vs.  Stratis

 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 relatively invariable fundamental drivers, Petroleo Brasileiro is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Petroleo Price Channel

Stratis 
Stratis Performance
0 of 100
Over the last 90 days Stratis has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Crypto's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for Stratis investors.

Stratis Price Channel

Petroleo Brasileiro and Stratis Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Petroleo Brasileiro and Stratis

The main advantage of trading using opposite Petroleo Brasileiro and Stratis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro position performs unexpectedly, Stratis 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 Stratis will offset losses from the drop in Stratis' long position.
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The idea behind Petroleo Brasileiro Petrobras and Stratis 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 Piotroski F Score module to get Piotroski F Score based on binary analysis strategy of nine different fundamentals.

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