Correlation Between BTG Pactual and HSBC Holdings
Can any of the company-specific risk be diversified away by investing in both BTG Pactual and HSBC Holdings 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 HSBC Holdings 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 HSBC Holdings plc, you can compare the effects of market volatilities on BTG Pactual and HSBC Holdings 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 HSBC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTG Pactual and HSBC Holdings.
Diversification Opportunities for BTG Pactual and HSBC Holdings
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BTG and HSBC is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding BTG Pactual Logstica and HSBC Holdings plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC Holdings plc 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 HSBC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HSBC Holdings plc has no effect on the direction of BTG Pactual i.e., BTG Pactual and HSBC Holdings go up and down completely randomly.
Pair Corralation between BTG Pactual and HSBC Holdings
Assuming the 90 days trading horizon BTG Pactual Logstica is expected to under-perform the HSBC Holdings. But the fund apears to be less risky and, when comparing its historical volatility, BTG Pactual Logstica is 2.37 times less risky than HSBC Holdings. The fund trades about -0.05 of its potential returns per unit of risk. The HSBC Holdings plc is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 4,419 in HSBC Holdings plc on August 27, 2024 and sell it today you would earn a total of 2,271 from holding HSBC Holdings plc or generate 51.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.95% |
| Values | Daily Returns |
BTG Pactual Logstica vs. HSBC Holdings plc
Performance |
| Timeline |
| BTG Pactual Logstica |
| HSBC Holdings plc |
BTG Pactual and HSBC Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTG Pactual and HSBC Holdings
The main advantage of trading using opposite BTG Pactual and HSBC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTG Pactual position performs unexpectedly, HSBC Holdings 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 HSBC Holdings will offset losses from the drop in HSBC Holdings' long position.| BTG Pactual vs. Fundo Investimento Imobiliario | BTG Pactual vs. KILIMA VOLKANO RECEBVEIS | BTG Pactual vs. Santander Renda De | BTG Pactual vs. DEVANT PROPERTIES FUNDO |
| HSBC Holdings vs. BTG Pactual Logstica | HSBC Holdings vs. Plano Plano Desenvolvimento | HSBC Holdings vs. Cable One | HSBC Holdings vs. ATMA Participaes 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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