Correlation Between Banco BTG and ConocoPhillips
Can any of the company-specific risk be diversified away by investing in both Banco BTG and ConocoPhillips 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 ConocoPhillips 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 ConocoPhillips, you can compare the effects of market volatilities on Banco BTG and ConocoPhillips 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 ConocoPhillips. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco BTG and ConocoPhillips.
Diversification Opportunities for Banco BTG and ConocoPhillips
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Banco and ConocoPhillips is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Banco BTG Pactual and ConocoPhillips in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConocoPhillips 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 ConocoPhillips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConocoPhillips has no effect on the direction of Banco BTG i.e., Banco BTG and ConocoPhillips go up and down completely randomly.
Pair Corralation between Banco BTG and ConocoPhillips
Assuming the 90 days trading horizon Banco BTG is expected to generate 2.08 times less return on investment than ConocoPhillips. But when comparing it to its historical volatility, Banco BTG Pactual is 1.22 times less risky than ConocoPhillips. It trades about 0.02 of its potential returns per unit of risk. ConocoPhillips is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5,039 in ConocoPhillips on August 29, 2024 and sell it today you would earn a total of 349.00 from holding ConocoPhillips or generate 6.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco BTG Pactual vs. ConocoPhillips
Performance |
| Timeline |
| Banco BTG Pactual |
| ConocoPhillips |
Banco BTG and ConocoPhillips Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco BTG and ConocoPhillips
The main advantage of trading using opposite Banco BTG and ConocoPhillips positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco BTG position performs unexpectedly, ConocoPhillips 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 ConocoPhillips will offset losses from the drop in ConocoPhillips' long position.The idea behind Banco BTG Pactual and ConocoPhillips 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.| ConocoPhillips vs. Deutsche Bank Aktiengesellschaft | ConocoPhillips vs. MAHLE Metal Leve | ConocoPhillips vs. SVB Financial Group | ConocoPhillips vs. Iron Mountain Incorporated |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |