Correlation Between BTG Pactual and Charter Communications
Can any of the company-specific risk be diversified away by investing in both BTG Pactual and Charter Communications 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 Charter Communications 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 Charter Communications, you can compare the effects of market volatilities on BTG Pactual and Charter Communications 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 Charter Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTG Pactual and Charter Communications.
Diversification Opportunities for BTG Pactual and Charter Communications
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BTG and Charter is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding BTG Pactual Logstica and Charter Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Communications 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 Charter Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charter Communications has no effect on the direction of BTG Pactual i.e., BTG Pactual and Charter Communications go up and down completely randomly.
Pair Corralation between BTG Pactual and Charter Communications
Assuming the 90 days trading horizon BTG Pactual is expected to generate 23.49 times less return on investment than Charter Communications. But when comparing it to its historical volatility, BTG Pactual Logstica is 5.19 times less risky than Charter Communications. It trades about 0.05 of its potential returns per unit of risk. Charter Communications is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 3,144 in Charter Communications on August 27, 2024 and sell it today you would earn a total of 568.00 from holding Charter Communications or generate 18.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTG Pactual Logstica vs. Charter Communications
Performance |
| Timeline |
| BTG Pactual Logstica |
| Charter Communications |
BTG Pactual and Charter Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTG Pactual and Charter Communications
The main advantage of trading using opposite BTG Pactual and Charter Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTG Pactual position performs unexpectedly, Charter Communications 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 Charter Communications will offset losses from the drop in Charter Communications' long position.| BTG Pactual vs. Plano Plano Desenvolvimento | BTG Pactual vs. Cable One | BTG Pactual vs. ATMA Participaes SA | BTG Pactual vs. British American Tobacco |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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