Correlation Between BP PLC and Petrobras Argentina
Can any of the company-specific risk be diversified away by investing in both BP PLC and Petrobras Argentina 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 BP PLC and Petrobras Argentina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BP PLC ADR and Petrobras Argentina SA, you can compare the effects of market volatilities on BP PLC and Petrobras Argentina 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 BP PLC with a short position of Petrobras Argentina. Check out your portfolio center. Please also check ongoing floating volatility patterns of BP PLC and Petrobras Argentina.
Diversification Opportunities for BP PLC and Petrobras Argentina
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BP PLC and Petrobras is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BP PLC ADR and Petrobras Argentina SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrobras Argentina and BP PLC 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 BP PLC ADR are associated (or correlated) with Petrobras Argentina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrobras Argentina has no effect on the direction of BP PLC i.e., BP PLC and Petrobras Argentina go up and down completely randomly.
Pair Corralation between BP PLC and Petrobras Argentina
If you would invest 3,520 in BP PLC ADR on January 26, 2024 and sell it today you would earn a total of 414.00 from holding BP PLC ADR or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
BP PLC ADR vs. Petrobras Argentina SA
Performance |
| Timeline |
| BP PLC ADR |
| Petrobras Argentina |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
BP PLC and Petrobras Argentina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BP PLC and Petrobras Argentina
The main advantage of trading using opposite BP PLC and Petrobras Argentina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BP PLC position performs unexpectedly, Petrobras Argentina 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 Petrobras Argentina will offset losses from the drop in Petrobras Argentina's long position.| BP PLC vs. TotalEnergies SE ADR | BP PLC vs. Chevron Corp | BP PLC vs. Exxon Mobil Corp | BP PLC vs. Equinor ASA ADR |
| Petrobras Argentina vs. Molecular Partners AG | Petrobras Argentina vs. SunLink Health Systems | Petrobras Argentina vs. Teleflex Incorporated | Petrobras Argentina vs. Ralph Lauren Corp |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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