Radar Perene / concept
Perene Risk Index
The Perene Risk Index is the proprietary reading of risk appetite in the Brazilian market — how much capital is leaning toward risk or protection (what the international jargon calls risk-on / risk-off) — on a single, didactic 0–100 scale.
What it is
A composite of market breadth (how many Brazilian stocks sustain a trend) and cross-asset risk appetite (small caps vs large caps, cyclicals vs defensives), normalized by an 84-day range rank — the position of the value between the recent window's minimum and maximum, not a z-score. Above ~68 signals risk appetite; below ~30, protection. The construction is inspired by composite readings of market risk appetite, adapted to Brazil (lower trading volume, volatile FX, distinct inflation) — without copying any foreign methodology. It accompanies any open asset, stacked under price alongside the Ânima Index.
Why it exists
Because the same price move has opposite readings depending on the environment. Petrobras falling under broad risk appetite is an idiosyncratic signal (something in the company/sector/regulation); Petrobras falling in a strong risk-off is market beta (everyone falls together). Without the risk tilt, the reader confuses idiosyncratic with systemic.
Turning-point signals (dated and validated)
At fear extremes followed by reversal — the index crosses below 5% and then above 68.5% — the Radar marks a dated turning-point signal on the chart. It is not a recommendation: it marks the same pattern that historically preceded recoveries, and each mark carries the actual outcome (what the Ibovespa did in the following months). Examples confronted with reality:
- January 2016 — the index nailed the bottom (range rank 3 → 82 in two weeks) ahead of roughly +70% that year.
- March 2020 (COVID) — extreme risk-off (16.7) preceded +29.6% for the Ibovespa over 6 months.
- History is not rewritten: every past reading is frozen and confronted with what happened — including cases where the signal did not work (transparency on hits and misses).
How to read it
Price + Ânima Index + Perene Risk Index builds a three-layer reading:
| Combination | Typical reading |
|---|---|
| Price falling + risk-off | Market beta — the asset follows the environment |
| Price falling + risk-on | Idiosyncratic signal — something specific to the asset |
| Price rising + risk-off | Relative refuge — the asset holds while the rest falls |
| Price rising + risk-on | Market beta — the asset follows the environment |
| Extreme Ânima + risk-off | Capitulation or exhaustion — watch for reversal |
| Extreme Ânima + risk-on | Euphoria or stretch — watch for reversal |
Perene Risk Index × BR Intermarket
Distinct, complementary lenses. The Perene Risk Index is sentiment — aggregate risk appetite, tracking any asset. The BR Intermarket reads specific asset ratios (financials, utilities, commodities, REITs, long÷short inflation-linked bonds) — a lens of cross-market leadership. Sentiment answers "which way the environment leans"; intermarket answers "which sectors/assets are leading or lagging".
What it does not mean
It does not mean risk-on is good and risk-off is bad. Both are states; what changes is the asymmetry ruler. It is not a decision, nor a buy/sell recommendation: the "turning-point signal" is a descriptive mark of a historical pattern, with the outcome in plain sight. The decision remains human.
Limits
The reading is daily and uses an 84-day range rank — transitions may take days to weeks to confirm. Brazil's market breadth is sparser than the US's (the breadth component gains robustness from 2009 onward, when small caps have history). It is descriptive of the historical distribution, never a forecast.
Example
PETR4 — price -2.1% on the day · Ânima Index 38 (pessimism) · Perene Risk Index: 28 (risk-off). The asset's decline is partly attributable to the environment; mood already reflects the defensive aggregate reading.
Related concepts: Ânima Index · Global Regime · Brazil Regime · see the full method