Correlation Between Banco BTG and IShares Trust
Can any of the company-specific risk be diversified away by investing in both Banco BTG and IShares Trust 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 Banco BTG and IShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco BTG Pactual and iShares Trust , you can compare the effects of market volatilities on Banco BTG and IShares Trust 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 Banco BTG with a short position of IShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco BTG and IShares Trust.
Diversification Opportunities for Banco BTG and IShares Trust
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Banco and IShares is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Banco BTG Pactual and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Trust and Banco BTG 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 Banco BTG Pactual are associated (or correlated) with IShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Trust has no effect on the direction of Banco BTG i.e., Banco BTG and IShares Trust go up and down completely randomly.
Pair Corralation between Banco BTG and IShares Trust
Assuming the 90 days trading horizon Banco BTG Pactual is expected to under-perform the IShares Trust. In addition to that, Banco BTG is 1.67 times more volatile than iShares Trust . It trades about -0.15 of its total potential returns per unit of risk. iShares Trust is currently generating about 0.55 per unit of volatility. If you would invest 8,944 in iShares Trust on September 1, 2024 and sell it today you would earn a total of 1,406 from holding iShares Trust or generate 15.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco BTG Pactual vs. iShares Trust
Performance |
| Timeline |
| Banco BTG Pactual |
| iShares Trust |
Banco BTG and IShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco BTG and IShares Trust
The main advantage of trading using opposite Banco BTG and IShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco BTG position performs unexpectedly, IShares Trust 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 IShares Trust will offset losses from the drop in IShares Trust's long position.The idea behind Banco BTG Pactual and iShares Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| IShares Trust vs. iShares BMFBovespa Small | IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. iShares iShares |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |