Correlation Between Ambipar Participaes and Petroreconcavo

Can any of the company-specific risk be diversified away by investing in both Ambipar Participaes and Petroreconcavo 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 Ambipar Participaes and Petroreconcavo into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ambipar Participaes e and Petroreconcavo SA, you can compare the effects of market volatilities on Ambipar Participaes and Petroreconcavo 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 Ambipar Participaes with a short position of Petroreconcavo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambipar Participaes and Petroreconcavo.

Diversification Opportunities for Ambipar Participaes and Petroreconcavo

0.67

Correlation Coefficient

Ambipar Participaes  Petroreconcavo

Poor diversification

The 3 months correlation between Ambipar and Petroreconcavo is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Ambipar Participaes e and Petroreconcavo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petroreconcavo SA and Ambipar Participaes 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 Ambipar Participaes e are associated (or correlated) with Petroreconcavo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petroreconcavo SA has no effect on the direction of Ambipar Participaes i.e., Ambipar Participaes and Petroreconcavo go up and down completely randomly.

Pair Corralation between Ambipar Participaes and Petroreconcavo

Assuming the 90 days trading horizon Ambipar Participaes is expected to generate 1.15 times less return on investment than Petroreconcavo. In addition to that, Ambipar Participaes is 1.92 times more volatile than Petroreconcavo SA. It trades about 0.02 of its total potential returns per unit of risk. Petroreconcavo SA is currently generating about 0.05 per unit of volatility. If you would invest  1,276  in Petroreconcavo SA on April 25, 2025 and sell it today you would earn a total of  79.00  from holding Petroreconcavo SA or generate 6.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Ambipar Participaes e  vs.  Petroreconcavo SA

Ambipar Participaes

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ambipar Participaes e are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Ambipar Participaes may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Petroreconcavo SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Petroreconcavo SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Petroreconcavo may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Ambipar Participaes and Petroreconcavo

The main advantage of trading using opposite Ambipar Participaes and Petroreconcavo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambipar Participaes position performs unexpectedly, Petroreconcavo 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 Petroreconcavo will offset losses from the drop in Petroreconcavo's long position.

The idea behind Ambipar Participaes e and Petroreconcavo SA 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.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.