Correlation Between BTG Pactual and Gafisa SA
Can any of the company-specific risk be diversified away by investing in both BTG Pactual and Gafisa SA 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 Gafisa SA 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 Gafisa SA, you can compare the effects of market volatilities on BTG Pactual and Gafisa SA 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 Gafisa SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTG Pactual and Gafisa SA.
Diversification Opportunities for BTG Pactual and Gafisa SA
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BTG and Gafisa is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding BTG Pactual Logstica and Gafisa SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gafisa SA 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 Gafisa SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gafisa SA has no effect on the direction of BTG Pactual i.e., BTG Pactual and Gafisa SA go up and down completely randomly.
Pair Corralation between BTG Pactual and Gafisa SA
Assuming the 90 days trading horizon BTG Pactual Logstica is expected to generate 0.15 times more return on investment than Gafisa SA. However, BTG Pactual Logstica is 6.73 times less risky than Gafisa SA. It trades about 0.07 of its potential returns per unit of risk. Gafisa SA is currently generating about -0.03 per unit of risk. If you would invest 9,620 in BTG Pactual Logstica on August 27, 2024 and sell it today you would earn a total of 88.00 from holding BTG Pactual Logstica or generate 0.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTG Pactual Logstica vs. Gafisa SA
Performance |
| Timeline |
| BTG Pactual Logstica |
| Gafisa SA |
BTG Pactual and Gafisa SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTG Pactual and Gafisa SA
The main advantage of trading using opposite BTG Pactual and Gafisa SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTG Pactual position performs unexpectedly, Gafisa SA 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 Gafisa SA will offset losses from the drop in Gafisa SA's 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 |
| Gafisa SA vs. Cyrela Brazil Realty | Gafisa SA vs. Rossi Residencial SA | Gafisa SA vs. MRV Engenharia e | Gafisa SA vs. PDG Realty 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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