Correlation Between BTG Pactual and Hedge Realty
Can any of the company-specific risk be diversified away by investing in both BTG Pactual and Hedge Realty 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 Hedge Realty 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 Hedge Realty Development, you can compare the effects of market volatilities on BTG Pactual and Hedge Realty 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 Hedge Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTG Pactual and Hedge Realty.
Diversification Opportunities for BTG Pactual and Hedge Realty
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BTG and Hedge is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding BTG Pactual Logstica and Hedge Realty Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hedge Realty Development 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 Hedge Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hedge Realty Development has no effect on the direction of BTG Pactual i.e., BTG Pactual and Hedge Realty go up and down completely randomly.
Pair Corralation between BTG Pactual and Hedge Realty
Assuming the 90 days trading horizon BTG Pactual is expected to generate 173.04 times less return on investment than Hedge Realty. But when comparing it to its historical volatility, BTG Pactual Logstica is 47.66 times less risky than Hedge Realty. It trades about 0.02 of its potential returns per unit of risk. Hedge Realty Development is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 430.00 in Hedge Realty Development on September 2, 2024 and sell it today you would lose (70.00) from holding Hedge Realty Development or give up 16.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
BTG Pactual Logstica vs. Hedge Realty Development
Performance |
| Timeline |
| BTG Pactual Logstica |
| Hedge Realty Development |
BTG Pactual and Hedge Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTG Pactual and Hedge Realty
The main advantage of trading using opposite BTG Pactual and Hedge Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTG Pactual position performs unexpectedly, Hedge Realty 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 Hedge Realty will offset losses from the drop in Hedge Realty'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 |
| Hedge Realty vs. Energisa SA | Hedge Realty vs. BTG Pactual Logstica | Hedge Realty vs. Plano Plano Desenvolvimento | Hedge Realty vs. Companhia Habitasul de |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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