Correlation Between Banco BTG and G2D Investments
Can any of the company-specific risk be diversified away by investing in both Banco BTG and G2D Investments 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 G2D Investments 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 G2D Investments, you can compare the effects of market volatilities on Banco BTG and G2D Investments 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 G2D Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco BTG and G2D Investments.
Diversification Opportunities for Banco BTG and G2D Investments
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Banco and G2D is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Banco BTG Pactual and G2D Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G2D Investments 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 G2D Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G2D Investments has no effect on the direction of Banco BTG i.e., Banco BTG and G2D Investments go up and down completely randomly.
Pair Corralation between Banco BTG and G2D Investments
Assuming the 90 days trading horizon Banco BTG Pactual is expected to under-perform the G2D Investments. In addition to that, Banco BTG is 1.35 times more volatile than G2D Investments. It trades about -0.11 of its total potential returns per unit of risk. G2D Investments is currently generating about -0.11 per unit of volatility. If you would invest 216.00 in G2D Investments on September 2, 2024 and sell it today you would lose (11.00) from holding G2D Investments or give up 5.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco BTG Pactual vs. G2D Investments
Performance |
| Timeline |
| Banco BTG Pactual |
| G2D Investments |
Banco BTG and G2D Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco BTG and G2D Investments
The main advantage of trading using opposite Banco BTG and G2D Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco BTG position performs unexpectedly, G2D Investments 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 G2D Investments will offset losses from the drop in G2D Investments' long position.| Banco BTG vs. Banco BTG Pactual | Banco BTG vs. Banco BTG Pactual | Banco BTG vs. Banco Santander SA | Banco BTG vs. Banco Santander SA |
| G2D Investments vs. Deutsche Bank Aktiengesellschaft | G2D Investments vs. Cognizant Technology Solutions | G2D Investments vs. Unity Software | G2D Investments vs. Palantir Technologies |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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