Correlation Between BTG Pactual and Banco Do
Can any of the company-specific risk be diversified away by investing in both BTG Pactual and Banco Do 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 Do 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 do Estado, you can compare the effects of market volatilities on BTG Pactual and Banco Do 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 Do. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTG Pactual and Banco Do.
Diversification Opportunities for BTG Pactual and Banco Do
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BTG and Banco is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding BTG Pactual Logstica and Banco do Estado in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco do Estado 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 Do. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco do Estado has no effect on the direction of BTG Pactual i.e., BTG Pactual and Banco Do go up and down completely randomly.
Pair Corralation between BTG Pactual and Banco Do
Assuming the 90 days trading horizon BTG Pactual Logstica is expected to generate 0.67 times more return on investment than Banco Do. However, BTG Pactual Logstica is 1.49 times less risky than Banco Do. It trades about -0.15 of its potential returns per unit of risk. Banco do Estado is currently generating about -0.16 per unit of risk. If you would invest 10,216 in BTG Pactual Logstica on August 31, 2024 and sell it today you would lose (716.00) from holding BTG Pactual Logstica or give up 7.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTG Pactual Logstica vs. Banco do Estado
Performance |
| Timeline |
| BTG Pactual Logstica |
| Banco do Estado |
BTG Pactual and Banco Do Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTG Pactual and Banco Do
The main advantage of trading using opposite BTG Pactual and Banco Do positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTG Pactual position performs unexpectedly, Banco Do 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 Do will offset losses from the drop in Banco Do's long position.| BTG Pactual vs. BTG Pactual Teva | BTG Pactual vs. BTG PACTUAL CRDITO | BTG Pactual vs. Real Estate Investment | BTG Pactual vs. NAVI CRDITO IMOBILIRIO |
| Banco Do vs. Banco do Estado | Banco Do vs. Banestes SA | Banco Do vs. Banco do Estado | Banco Do vs. Banco Santander SA |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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