Petroleo Stock Volatility

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Petroleo Brasileiro Market Sensitivity And Downside Risk

Petroleo Brasileiro Petrobras currently demonstrates below-average downside deviation. It has Information Ratio of 0.08 and Jensen Alpha of 0.21. However, we advise investors to further question Petroleo Brasileiro Petrobras expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Petroleo Brasileiro's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Petroleo Brasileiro's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall. 3 Months Beta |Analyze Petroleo Brasileiro Demand TrendCheck current 90 days Petroleo Brasileiro correlation with market (NYSE Composite)

Petroleo Beta

0.8

Standard Deviation

2.8

Using Petroleo Put Option to Manage Risk

Petroleo Brasileiro's PUT expiring on 2023-03-24

Petroleo Brasileiro Stock Volatility Analysis

Petroleo Brasileiro Projected Return Density Against Market

Considering the 90-day investment horizon Petroleo Brasileiro has a beta of 0.8003 indicating as returns on the market go up, Petroleo Brasileiro average returns are expected to increase less than the benchmark. However, during the bear market, the loss on holding Petroleo Brasileiro Petrobras will be expected to be much smaller as well. The company has an alpha of 0.2097, implying that it can generate a 0.21 percent excess return over NYSE Composite after adjusting for the inherited market risk (beta). Petroleo Brasileiro's volatility is measured either by using standard deviation or beta. Standard deviation will reflect the average amount of how petroleo stock's price will differ from the mean after some time.To get its calculation, you should first determine the mean price during the specified period then subtract that from each price point.

What Drives a Petroleo Brasileiro Price Volatility?

Several factors can influence a stock's market volatility:

Industry

Specific events can influence volatility within a particular industry. For instance, a significant weather upheaval in a crucial oil-production site may cause oil prices to increase in the oil sector. The direct result will be the rise in the stock price of oil distribution companies. Similarly, any government regulation in a specific industry could negatively influence stock prices due to increased regulations on compliance that may impact the company's future earnings and growth.

Political and Economic environment

When governments make significant decisions regarding trade agreements, policies, and legislation regarding specific industries, they will influence stock prices. Everything from speeches to elections may influence investors, who can directly influence the stock prices in any particular industry. The prevailing economic situation also plays a significant role in stock prices. When the economy is doing well, investors will have a positive reaction and hence, better stock prices and vice versa.

The Company's Performance

Sometimes volatility will only affect an individual company. For example, a revolutionary product launch or strong earnings report may attract many investors to purchase the company. This positive attention will raise the company's stock price. In contrast, product recalls and data breaches may negatively influence a company's stock prices.

Petroleo Brasileiro Stock Risk Measures

Petroleo Brasileiro Stock Return Volatility

Petroleo Brasileiro historical daily return volatility represents how much of Petroleo Brasileiro stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The enterprise has volatility of 2.7981% on return distribution over 90 days investment horizon. By contrast, NYSE Composite accepts 0.9454% volatility on return distribution over the 90 days horizon.

Volatility is a rate at which the price of Petroleo Brasileiro or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Petroleo Brasileiro may increase or decrease. In other words, similar to Petroleo's beta indicator, it measures the risk of Petroleo Brasileiro and helps estimate the fluctuations that may happen in a short period of time. So if prices of Petroleo Brasileiro fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility.

Petroleo Brasileiro's stock volatility refers to the amount of uncertainty or risk involved with the size of changes in its stock's price. It is a statistical measure of the dispersion of returns on Petroleo Stock over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much Petroleo Brasileiro's price varies over time.

The analysis of Petroleo Brasileiro's secondary risk indicators is one of the essential steps in making a buy or sell decision. The process involves identifying the amount of risk involved in Petroleo Brasileiro's investment and either accepting that risk or mitigating it. Along with some common measures of Petroleo Brasileiro stock's risk such as standard deviation, beta, or value at risk, we also provide a set of secondary indicators that can assist in the individual investment decision or help in hedging the risk of your existing portfolios.

Please note, the risk measures we provide can be used independently or collectively to perform a risk assessment. When comparing two potential stocks, we recommend comparing similar stocks with homogenous growth potential and valuation from related markets to determine which investment holds the most risk.

Pair trading is one of the very effective strategies used by professional day traders and hedge funds capitalizing on short-time and mid-term market inefficiencies. The approach is based on the fact that the ratio of prices of two correlating shares is long-term stable and oscillates around the average value. If the correlation ratio comes outside the common area, you can speculate with a high success rate that the ratio will return to the mean value and collect a profit.

The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Petroleo Brasileiro as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Petroleo Brasileiro's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Petroleo Brasileiro's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Petroleo Brasileiro Petrobras.

Please check Your Equity Center. Note that the Petroleo Brasileiro information on this page should be used as a complementary analysis to other Petroleo Brasileiro's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Watchlist Optimization module to optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm.

When running Petroleo Brasileiro price analysis, check to measure Petroleo Brasileiro's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Petroleo Brasileiro is operating at the current time. Most of Petroleo Brasileiro's value examination focuses on studying past and present price action to predict the probability of Petroleo Brasileiro's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Petroleo Brasileiro's price. Additionally, you may evaluate how the addition of Petroleo Brasileiro to your portfolios can decrease your overall portfolio volatility.

Is Petroleo Brasileiro's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Petroleo Brasileiro. If investors know Petroleo will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Petroleo Brasileiro listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.

The market value of Petroleo Brasileiro is measured differently than its book value, which is the value of Petroleo that is recorded on the company's balance sheet. Investors also form their own opinion of Petroleo Brasileiro's value that differs from its market value or its book value, called intrinsic value, which is Petroleo Brasileiro's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Petroleo Brasileiro's market value can be influenced by many factors that don't directly affect Petroleo Brasileiro's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.

Please note, there is a significant difference between Petroleo Brasileiro's value and its price as these two are different measures arrived at by different means. Investors typically determine Petroleo Brasileiro value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Petroleo Brasileiro's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.