PBR is correlated to oil prices, but that's not all...

PBR is correlated to oil prices, but that's not all. Out of a selection of other oil majors, PBR underperforms significantly when the starting month of August 2011 is chosen, a date I arbitrarily chose due to launch of a new industrial policy in Brasil (a proxy of changing economic policy). Note, however, work done by my friend, Raphael Geraldelli (related ideas), showing a much closer correlation of PBR to oil prices in a more recent period (tradingview.com/x/VTwzjp3a/). The takeaway here is that although PBR is correlated to oil prices, internal company issues and Brazilian political economy played an important historical role in the stock's price and I believe it will continue to do so moving foreword.