Correlation Between Bread Financial and BTG Pactual
Can any of the company-specific risk be diversified away by investing in both Bread Financial and BTG Pactual 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 Bread Financial and BTG Pactual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bread Financial Holdings and BTG Pactual Logstica, you can compare the effects of market volatilities on Bread Financial and BTG Pactual 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 Bread Financial with a short position of BTG Pactual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bread Financial and BTG Pactual.
Diversification Opportunities for Bread Financial and BTG Pactual
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bread and BTG is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Bread Financial Holdings and BTG Pactual Logstica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTG Pactual Logstica and Bread Financial 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 Bread Financial Holdings are associated (or correlated) with BTG Pactual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTG Pactual Logstica has no effect on the direction of Bread Financial i.e., Bread Financial and BTG Pactual go up and down completely randomly.
Pair Corralation between Bread Financial and BTG Pactual
Assuming the 90 days trading horizon Bread Financial Holdings is expected to generate 4.87 times more return on investment than BTG Pactual. However, Bread Financial is 4.87 times more volatile than BTG Pactual Logstica. It trades about 0.04 of its potential returns per unit of risk. BTG Pactual Logstica is currently generating about -0.11 per unit of risk. If you would invest 7,942 in Bread Financial Holdings on August 28, 2024 and sell it today you would earn a total of 394.00 from holding Bread Financial Holdings or generate 4.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bread Financial Holdings vs. BTG Pactual Logstica
Performance |
| Timeline |
| Bread Financial Holdings |
| BTG Pactual Logstica |
Bread Financial and BTG Pactual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bread Financial and BTG Pactual
The main advantage of trading using opposite Bread Financial and BTG Pactual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bread Financial position performs unexpectedly, BTG Pactual 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 BTG Pactual will offset losses from the drop in BTG Pactual's long position.| Bread Financial vs. Fras le SA | Bread Financial vs. Clave Indices De | Bread Financial vs. BTG Pactual Logstica | Bread Financial vs. Telefonaktiebolaget LM Ericsson |
| BTG Pactual vs. Plano Plano Desenvolvimento | BTG Pactual vs. Cable One | BTG Pactual vs. ATMA Participaes SA | BTG Pactual vs. British American Tobacco |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |