Correlation Between BTG Pactual and Telefonaktiebolaget
Can any of the company-specific risk be diversified away by investing in both BTG Pactual and Telefonaktiebolaget 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 Telefonaktiebolaget 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 Telefonaktiebolaget LM Ericsson, you can compare the effects of market volatilities on BTG Pactual and Telefonaktiebolaget 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 Telefonaktiebolaget. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTG Pactual and Telefonaktiebolaget.
Diversification Opportunities for BTG Pactual and Telefonaktiebolaget
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BTG and Telefonaktiebolaget is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding BTG Pactual Logstica and Telefonaktiebolaget LM Ericsso in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telefonaktiebolaget 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 Telefonaktiebolaget. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telefonaktiebolaget has no effect on the direction of BTG Pactual i.e., BTG Pactual and Telefonaktiebolaget go up and down completely randomly.
Pair Corralation between BTG Pactual and Telefonaktiebolaget
Assuming the 90 days trading horizon BTG Pactual Logstica is expected to generate 0.25 times more return on investment than Telefonaktiebolaget. However, BTG Pactual Logstica is 3.93 times less risky than Telefonaktiebolaget. It trades about -0.02 of its potential returns per unit of risk. Telefonaktiebolaget LM Ericsson is currently generating about -0.11 per unit of risk. If you would invest 9,470 in BTG Pactual Logstica on November 5, 2024 and sell it today you would lose (40.00) from holding BTG Pactual Logstica or give up 0.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTG Pactual Logstica vs. Telefonaktiebolaget LM Ericsso
Performance |
| Timeline |
| BTG Pactual Logstica |
| Telefonaktiebolaget |
BTG Pactual and Telefonaktiebolaget Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTG Pactual and Telefonaktiebolaget
The main advantage of trading using opposite BTG Pactual and Telefonaktiebolaget positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTG Pactual position performs unexpectedly, Telefonaktiebolaget 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 Telefonaktiebolaget will offset losses from the drop in Telefonaktiebolaget's long position.| BTG Pactual vs. Btg Pactual Real | BTG Pactual vs. Fundo Investimento Imobiliario | BTG Pactual vs. KILIMA VOLKANO RECEBVEIS | 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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