--- title: PSI-20 index Analysis description: PSI-20 index Analysis image: https://insights.bbspresearch.com/hubfs/Golden%20Cross-1.png --- [Skip to content](https://insights.bbspresearch.com/blog/psi-20-index-analysis#main-content) [![logo-bbsp-beige1](https://insights.bbspresearch.com/hs-fs/hubfs/logo-bbsp-beige1.png?width=87&height=108&name=logo-bbsp-beige1.png)](https://itsupport716.wixstudio.com/bbsp) - [About Us](https://itsupport716.wixstudio.com/bbsp) - [Our Team](https://itsupport716.wixstudio.com/bbsp/our-team) - [Service](https://itsupport716.wixstudio.com/bbsp/services) - [Insights](https://insights.bbspresearch.com/blog) - [Careers](https://itsupport716.wixstudio.com/bbsp/careers) - [Contact](https://itsupport716.wixstudio.com/bbsp/contact) - [Client Area >>](https://www.bbsp-tao.com/) Open main navigation Close main navigation - [About Us](https://itsupport716.wixstudio.com/bbsp) - [Our Team](https://itsupport716.wixstudio.com/bbsp/our-team) - [Service](https://itsupport716.wixstudio.com/bbsp/services) - [Insights](https://insights.bbspresearch.com/blog) - [Careers](https://itsupport716.wixstudio.com/bbsp/careers) - [Contact](https://itsupport716.wixstudio.com/bbsp/contact) - [Client Area >>](https://www.bbsp-tao.com/) April 07, 2026 # PSI-20 index Analysis [Paris Analyst team](https://insights.bbspresearch.com/blog/author/paris-analyst-team) Share: [linkedin-in icon](http://www.linkedin.com/shareArticle?mini=true&url=https://insights.bbspresearch.com/blog/psi-20-index-analysis) [X Twitter icon](https://twitter.com/intent/tweet?url=https://insights.bbspresearch.com/blog/psi-20-index-analysis) [envelope icon](mailto:?body=https://insights.bbspresearch.com/blog/psi-20-index-analysis) Portugal is rarely mentioned in discussions about European equity allocation. However, the PSI-20 index shows several interesting diversification properties — particularly in high oil price environments. A few observations from a quick analysis 👇 1️⃣ Relative performance since the pandemic: When normalizing European equity indices to January 2020 levels, PSI-20 shows a notable acceleration in performance after the COVID period. Two phases are particularly visible: 1) the energy shock in 2022 2) the recent period of renewed geopolitical volatility (Chart 1 – normalized performance since 2020) 2️⃣ A competitive risk-return profile: From a risk-return perspective, PSI-20 has delivered median annualized returns stronger than several major European indices since 2020. Risk-adjusted metrics such as Sharpe ratio shows significant outperformance in both 2022 and 2026 with competitive results in other years. (Chart 2 – return / Sharpe comparison) 3️⃣ Diversification within European equities: Perhaps more interesting from an allocation standpoint is the correlation structure. The Portuguese equity market shows relatively low correlation with major European indices, which may provide diversification benefits within a regional equity allocation. (Chart 3 – correlation heatmap) 4️⃣ Performance in high oil price environments: Finally, I tested the behaviour of PSI-20 during periods of elevated oil prices. Defining a high oil regime as Brent above $85 per barrel, the index shows stronger average returns during these periods. (Chart 4 – returns conditional on oil regime) Possible explanation: The index has significant exposure to utilities and energy-related companies, while Portugal itself relies heavily on renewable electricity production. This combination may allow local companies to benefit from rising energy prices while remaining relatively resilient to oil shocks. Key consideration: PSI-20 appears to offer interesting diversification properties, particularly in environments characterized by elevated energy prices and geopolitical uncertainty. A reminder that smaller indices can sometimes provide unexpected diversification within European equity allocations.      ## Related posts [![](https://insights.bbspresearch.com/hs-fs/hubfs/stock-exchange-642896_1280_resized2.jpg?height=200&name=stock-exchange-642896_1280_resized2.jpg)](https://insights.bbspresearch.com/blog/volatility-prediction-topics-fundamentals-versus-behavioral) ## [Volatility prediction topics: Fundamentals versus Behavioral](https://insights.bbspresearch.com/blog/volatility-prediction-topics-fundamentals-versus-behavioral) April 07, 2026 Volatility is a key concept in financial markets, it is the quantification of fear and greed. We... 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