Correlation Between BTG Pactual and PPLA Participations
Can any of the company-specific risk be diversified away by investing in both BTG Pactual and PPLA Participations 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 PPLA Participations 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 PPLA Participations, you can compare the effects of market volatilities on BTG Pactual and PPLA Participations 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 PPLA Participations. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTG Pactual and PPLA Participations.
Diversification Opportunities for BTG Pactual and PPLA Participations
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BTG and PPLA is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding BTG Pactual Logstica and PPLA Participations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPLA Participations 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 PPLA Participations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPLA Participations has no effect on the direction of BTG Pactual i.e., BTG Pactual and PPLA Participations go up and down completely randomly.
Pair Corralation between BTG Pactual and PPLA Participations
Assuming the 90 days trading horizon BTG Pactual Logstica is expected to under-perform the PPLA Participations. But the fund apears to be less risky and, when comparing its historical volatility, BTG Pactual Logstica is 11.32 times less risky than PPLA Participations. The fund trades about 0.0 of its potential returns per unit of risk. The PPLA Participations is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 230.00 in PPLA Participations on August 29, 2024 and sell it today you would lose (3.00) from holding PPLA Participations or give up 1.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTG Pactual Logstica vs. PPLA Participations
Performance |
| Timeline |
| BTG Pactual Logstica |
| PPLA Participations |
BTG Pactual and PPLA Participations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTG Pactual and PPLA Participations
The main advantage of trading using opposite BTG Pactual and PPLA Participations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTG Pactual position performs unexpectedly, PPLA Participations 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 PPLA Participations will offset losses from the drop in PPLA Participations' long position.| BTG Pactual vs. BTG Pactual Teva | BTG Pactual vs. BTG PACTUAL CRDITO | BTG Pactual vs. Real Estate Investment | BTG Pactual vs. NAVI CRDITO IMOBILIRIO |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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