Correlation Between BTG Pactual and Align Technology
Can any of the company-specific risk be diversified away by investing in both BTG Pactual and Align Technology 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 BTG Pactual and Align Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BTG Pactual Logstica and Align Technology, you can compare the effects of market volatilities on BTG Pactual and Align Technology 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 BTG Pactual with a short position of Align Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTG Pactual and Align Technology.
Diversification Opportunities for BTG Pactual and Align Technology
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BTG and Align is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding BTG Pactual Logstica and Align Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Align Technology and BTG Pactual 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 BTG Pactual Logstica are associated (or correlated) with Align Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Align Technology has no effect on the direction of BTG Pactual i.e., BTG Pactual and Align Technology go up and down completely randomly.
Pair Corralation between BTG Pactual and Align Technology
Assuming the 90 days trading horizon BTG Pactual is expected to generate 2.69 times less return on investment than Align Technology. But when comparing it to its historical volatility, BTG Pactual Logstica is 1.52 times less risky than Align Technology. It trades about 0.12 of its potential returns per unit of risk. Align Technology is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 31,230 in Align Technology on August 26, 2024 and sell it today you would earn a total of 1,506 from holding Align Technology or generate 4.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTG Pactual Logstica vs. Align Technology
Performance |
| Timeline |
| BTG Pactual Logstica |
| Align Technology |
BTG Pactual and Align Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTG Pactual and Align Technology
The main advantage of trading using opposite BTG Pactual and Align Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTG Pactual position performs unexpectedly, Align Technology 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 Align Technology will offset losses from the drop in Align Technology's long position.| BTG Pactual vs. Fundo Investimento Imobiliario | BTG Pactual vs. KILIMA VOLKANO RECEBVEIS | BTG Pactual vs. Santander Renda De | BTG Pactual vs. DEVANT PROPERTIES FUNDO |
| Align Technology vs. Abbott Laboratories | Align Technology vs. Boston Scientific | Align Technology vs. Energisa SA | Align Technology vs. BTG Pactual Logstica |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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