Correlation Between Banco BTG and Helbor Empreendimentos
Can any of the company-specific risk be diversified away by investing in both Banco BTG and Helbor Empreendimentos 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 Helbor Empreendimentos 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 Helbor Empreendimentos SA, you can compare the effects of market volatilities on Banco BTG and Helbor Empreendimentos 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 Helbor Empreendimentos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco BTG and Helbor Empreendimentos.
Diversification Opportunities for Banco BTG and Helbor Empreendimentos
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Banco and Helbor is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Banco BTG Pactual and Helbor Empreendimentos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helbor Empreendimentos 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 Helbor Empreendimentos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helbor Empreendimentos has no effect on the direction of Banco BTG i.e., Banco BTG and Helbor Empreendimentos go up and down completely randomly.
Pair Corralation between Banco BTG and Helbor Empreendimentos
Assuming the 90 days trading horizon Banco BTG Pactual is expected to generate 0.61 times more return on investment than Helbor Empreendimentos. However, Banco BTG Pactual is 1.65 times less risky than Helbor Empreendimentos. It trades about 0.05 of its potential returns per unit of risk. Helbor Empreendimentos SA is currently generating about 0.01 per unit of risk. If you would invest 2,319 in Banco BTG Pactual on August 24, 2024 and sell it today you would earn a total of 1,011 from holding Banco BTG Pactual or generate 43.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.8% |
| Values | Daily Returns |
Banco BTG Pactual vs. Helbor Empreendimentos SA
Performance |
| Timeline |
| Banco BTG Pactual |
| Helbor Empreendimentos |
Banco BTG and Helbor Empreendimentos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco BTG and Helbor Empreendimentos
The main advantage of trading using opposite Banco BTG and Helbor Empreendimentos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco BTG position performs unexpectedly, Helbor Empreendimentos 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 Helbor Empreendimentos will offset losses from the drop in Helbor Empreendimentos' long position.The idea behind Banco BTG Pactual and Helbor Empreendimentos SA 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.| Helbor Empreendimentos vs. Tecnisa SA | Helbor Empreendimentos vs. Even Construtora e | Helbor Empreendimentos vs. JHSF Participaes SA | Helbor Empreendimentos vs. EZTEC Empreendimentos e |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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