Correlation Between Alupar Investimento and Banco BTG
Can any of the company-specific risk be diversified away by investing in both Alupar Investimento and Banco BTG 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 Alupar Investimento and Banco BTG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alupar Investimento SA and Banco BTG Pactual, you can compare the effects of market volatilities on Alupar Investimento and Banco BTG 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 Alupar Investimento with a short position of Banco BTG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alupar Investimento and Banco BTG.
Diversification Opportunities for Alupar Investimento and Banco BTG
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alupar and Banco is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Alupar Investimento SA and Banco BTG Pactual in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco BTG Pactual and Alupar Investimento 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 Alupar Investimento SA are associated (or correlated) with Banco BTG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco BTG Pactual has no effect on the direction of Alupar Investimento i.e., Alupar Investimento and Banco BTG go up and down completely randomly.
Pair Corralation between Alupar Investimento and Banco BTG
Assuming the 90 days trading horizon Alupar Investimento SA is expected to under-perform the Banco BTG. But the stock apears to be less risky and, when comparing its historical volatility, Alupar Investimento SA is 1.47 times less risky than Banco BTG. The stock trades about 0.0 of its potential returns per unit of risk. The Banco BTG Pactual is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 3,215 in Banco BTG Pactual on September 12, 2024 and sell it today you would lose (131.00) from holding Banco BTG Pactual or give up 4.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.43% |
| Values | Daily Returns |
Alupar Investimento SA vs. Banco BTG Pactual
Performance |
| Timeline |
| Alupar Investimento |
| Banco BTG Pactual |
Alupar Investimento and Banco BTG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alupar Investimento and Banco BTG
The main advantage of trading using opposite Alupar Investimento and Banco BTG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alupar Investimento position performs unexpectedly, Banco BTG 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 Banco BTG will offset losses from the drop in Banco BTG's long position.| Alupar Investimento vs. Transmissora Aliana de | Alupar Investimento vs. BB Seguridade Participacoes | Alupar Investimento vs. Hypera SA | Alupar Investimento vs. Energisa SA |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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