Correlation Between BTG Pactual and Banco Santander
Can any of the company-specific risk be diversified away by investing in both BTG Pactual and Banco Santander 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 Banco Santander 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 Banco Santander Chile, you can compare the effects of market volatilities on BTG Pactual and Banco Santander 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 Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTG Pactual and Banco Santander.
Diversification Opportunities for BTG Pactual and Banco Santander
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BTG and Banco is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding BTG Pactual Logstica and Banco Santander Chile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Santander Chile 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 Banco Santander. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Santander Chile has no effect on the direction of BTG Pactual i.e., BTG Pactual and Banco Santander go up and down completely randomly.
Pair Corralation between BTG Pactual and Banco Santander
Assuming the 90 days trading horizon BTG Pactual Logstica is expected to generate 0.61 times more return on investment than Banco Santander. However, BTG Pactual Logstica is 1.64 times less risky than Banco Santander. It trades about -0.02 of its potential returns per unit of risk. Banco Santander Chile is currently generating about -0.04 per unit of risk. If you would invest 9,783 in BTG Pactual Logstica on August 26, 2024 and sell it today you would lose (75.00) from holding BTG Pactual Logstica or give up 0.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTG Pactual Logstica vs. Banco Santander Chile
Performance |
| Timeline |
| BTG Pactual Logstica |
| Banco Santander Chile |
BTG Pactual and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTG Pactual and Banco Santander
The main advantage of trading using opposite BTG Pactual and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTG Pactual position performs unexpectedly, Banco Santander 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 Banco Santander will offset losses from the drop in Banco Santander'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 |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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