Correlation Between BICE11 and BTG Pactual
Can any of the company-specific risk be diversified away by investing in both BICE11 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 BICE11 and BTG Pactual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BICE11 and BTG Pactual Logstica, you can compare the effects of market volatilities on BICE11 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 BICE11 with a short position of BTG Pactual. Check out your portfolio center. Please also check ongoing floating volatility patterns of BICE11 and BTG Pactual.
Diversification Opportunities for BICE11 and BTG Pactual
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BICE11 and BTG is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding BICE11 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 BICE11 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 BICE11 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 BICE11 i.e., BICE11 and BTG Pactual go up and down completely randomly.
Pair Corralation between BICE11 and BTG Pactual
Assuming the 90 days trading horizon BICE11 is expected to generate 2.66 times more return on investment than BTG Pactual. However, BICE11 is 2.66 times more volatile than BTG Pactual Logstica. It trades about 0.03 of its potential returns per unit of risk. BTG Pactual Logstica is currently generating about -0.05 per unit of risk. If you would invest 83,553 in BICE11 on September 12, 2024 and sell it today you would earn a total of 6,547 from holding BICE11 or generate 7.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 64.85% |
| Values | Daily Returns |
BICE11 vs. BTG Pactual Logstica
Performance |
| Timeline |
| BICE11 |
| BTG Pactual Logstica |
BICE11 and BTG Pactual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BICE11 and BTG Pactual
The main advantage of trading using opposite BICE11 and BTG Pactual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BICE11 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.| BICE11 vs. BTG Pactual Logstica | BICE11 vs. Plano Plano Desenvolvimento | BICE11 vs. Companhia Habitasul de | BICE11 vs. FDO INV IMOB |
| BTG Pactual vs. BTG Pactual Teva | BTG Pactual vs. BTG PACTUAL CRDITO | BTG Pactual vs. FDO INV IMOB | BTG Pactual vs. SUPREMO FUNDO DE |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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