Correlation Between BTG Pactual and Dow Jones
Can any of the company-specific risk be diversified away by investing in both BTG Pactual and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on BTG Pactual and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTG Pactual and Dow Jones.
Diversification Opportunities for BTG Pactual and Dow Jones
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BTG and Dow is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding BTG Pactual Logstica and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of BTG Pactual i.e., BTG Pactual and Dow Jones go up and down completely randomly.
Pair Corralation between BTG Pactual and Dow Jones
Assuming the 90 days trading horizon BTG Pactual is expected to generate 21.91 times less return on investment than Dow Jones. But when comparing it to its historical volatility, BTG Pactual Logstica is 1.11 times less risky than Dow Jones. It trades about 0.01 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,356,286 in Dow Jones Industrial on August 27, 2024 and sell it today you would earn a total of 1,073,365 from holding Dow Jones Industrial or generate 31.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTG Pactual Logstica vs. Dow Jones Industrial
Performance |
| Timeline |
BTG Pactual and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
BTG Pactual Logstica
Pair trading matchups for BTG Pactual
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with BTG Pactual and Dow Jones
The main advantage of trading using opposite BTG Pactual and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTG Pactual position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' 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 |
| Dow Jones vs. Meiwu Technology Co | Dow Jones vs. 17 Education Technology | Dow Jones vs. 51Talk Online Education | Dow Jones vs. Afya |
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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