Correlation Between BTG Pactual and BICE11
Can any of the company-specific risk be diversified away by investing in both BTG Pactual and BICE11 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 BICE11 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 BICE11, you can compare the effects of market volatilities on BTG Pactual and BICE11 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 BICE11. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTG Pactual and BICE11.
Diversification Opportunities for BTG Pactual and BICE11
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BTG and BICE11 is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding BTG Pactual Logstica and BICE11 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BICE11 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 BICE11. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BICE11 has no effect on the direction of BTG Pactual i.e., BTG Pactual and BICE11 go up and down completely randomly.
Pair Corralation between BTG Pactual and BICE11
Assuming the 90 days trading horizon BTG Pactual is expected to generate 20.81 times less return on investment than BICE11. But when comparing it to its historical volatility, BTG Pactual Logstica is 2.59 times less risky than BICE11. It trades about 0.0 of its potential returns per unit of risk. BICE11 is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 83,553 in BICE11 on September 12, 2024 and sell it today you would earn a total of 6,547 from holding BICE11 or generate 7.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 43.06% |
| Values | Daily Returns |
BTG Pactual Logstica vs. BICE11
Performance |
| Timeline |
| BTG Pactual Logstica |
| BICE11 |
BTG Pactual and BICE11 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTG Pactual and BICE11
The main advantage of trading using opposite BTG Pactual and BICE11 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTG Pactual position performs unexpectedly, BICE11 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 BICE11 will offset losses from the drop in BICE11's long position.| BTG Pactual vs. BTG Pactual Teva | BTG Pactual vs. BTG PACTUAL CRDITO | BTG Pactual vs. FDO INV IMOB | BTG Pactual vs. SUPREMO FUNDO DE |
| BICE11 vs. BTG Pactual Logstica | BICE11 vs. Plano Plano Desenvolvimento | BICE11 vs. Companhia Habitasul de | BICE11 vs. FDO INV IMOB |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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