Correlation Between Bicicletas Monark and BTG Pactual
Can any of the company-specific risk be diversified away by investing in both Bicicletas Monark 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 Bicicletas Monark and BTG Pactual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bicicletas Monark SA and BTG Pactual Logstica, you can compare the effects of market volatilities on Bicicletas Monark 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 Bicicletas Monark with a short position of BTG Pactual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bicicletas Monark and BTG Pactual.
Diversification Opportunities for Bicicletas Monark and BTG Pactual
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bicicletas and BTG is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Bicicletas Monark SA 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 Bicicletas Monark 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 Bicicletas Monark SA 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 Bicicletas Monark i.e., Bicicletas Monark and BTG Pactual go up and down completely randomly.
Pair Corralation between Bicicletas Monark and BTG Pactual
Assuming the 90 days trading horizon Bicicletas Monark SA is expected to generate 3.23 times more return on investment than BTG Pactual. However, Bicicletas Monark is 3.23 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 0.03 per unit of risk. If you would invest 29,977 in Bicicletas Monark SA on January 23, 2025 and sell it today you would earn a total of 8,523 from holding Bicicletas Monark SA or generate 28.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.58% |
| Values | Daily Returns |
Bicicletas Monark SA vs. BTG Pactual Logstica
Performance |
| Timeline |
| Bicicletas Monark |
| BTG Pactual Logstica |
Bicicletas Monark and BTG Pactual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bicicletas Monark and BTG Pactual
The main advantage of trading using opposite Bicicletas Monark and BTG Pactual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bicicletas Monark 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.| Bicicletas Monark vs. Bombril SA | Bicicletas Monark vs. Banestes SA | Bicicletas Monark vs. Banco Alfa de | Bicicletas Monark vs. Biomm SA |
| BTG Pactual vs. Kinea Oportunidades Real | BTG Pactual vs. Btg Pactual Real | BTG Pactual vs. KILIMA VOLKANO RECEBVEIS | BTG Pactual vs. KINEA CRDITO AGRO |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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