Correlation Between Banco BTG and Plano Plano
Can any of the company-specific risk be diversified away by investing in both Banco BTG and Plano Plano 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 Plano Plano 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 Plano Plano Desenvolvimento, you can compare the effects of market volatilities on Banco BTG and Plano Plano 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 Plano Plano. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco BTG and Plano Plano.
Diversification Opportunities for Banco BTG and Plano Plano
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Banco and Plano is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Banco BTG Pactual and Plano Plano Desenvolvimento in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plano Plano Desenvol 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 Plano Plano. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plano Plano Desenvol has no effect on the direction of Banco BTG i.e., Banco BTG and Plano Plano go up and down completely randomly.
Pair Corralation between Banco BTG and Plano Plano
Assuming the 90 days trading horizon Banco BTG is expected to generate 2.13 times less return on investment than Plano Plano. But when comparing it to its historical volatility, Banco BTG Pactual is 1.06 times less risky than Plano Plano. It trades about 0.05 of its potential returns per unit of risk. Plano Plano Desenvolvimento is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,348 in Plano Plano Desenvolvimento on August 29, 2024 and sell it today you would earn a total of 51.00 from holding Plano Plano Desenvolvimento or generate 3.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco BTG Pactual vs. Plano Plano Desenvolvimento
Performance |
| Timeline |
| Banco BTG Pactual |
| Plano Plano Desenvol |
Banco BTG and Plano Plano Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco BTG and Plano Plano
The main advantage of trading using opposite Banco BTG and Plano Plano positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco BTG position performs unexpectedly, Plano Plano 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 Plano Plano will offset losses from the drop in Plano Plano's long position.The idea behind Banco BTG Pactual and Plano Plano Desenvolvimento 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.| Plano Plano vs. Credit Acceptance | Plano Plano vs. SVB Financial Group | Plano Plano vs. Tres Tentos Agroindustrial | Plano Plano vs. Zoom Video Communications |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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