Correlation Between BTG Pactual and Starbucks
Can any of the company-specific risk be diversified away by investing in both BTG Pactual and Starbucks 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 Starbucks 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 Starbucks, you can compare the effects of market volatilities on BTG Pactual and Starbucks 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 Starbucks. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTG Pactual and Starbucks.
Diversification Opportunities for BTG Pactual and Starbucks
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BTG and Starbucks is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding BTG Pactual Logstica and Starbucks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starbucks 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 Starbucks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Starbucks has no effect on the direction of BTG Pactual i.e., BTG Pactual and Starbucks go up and down completely randomly.
Pair Corralation between BTG Pactual and Starbucks
Assuming the 90 days trading horizon BTG Pactual is expected to generate 4.43 times less return on investment than Starbucks. But when comparing it to its historical volatility, BTG Pactual Logstica is 3.09 times less risky than Starbucks. It trades about 0.02 of its potential returns per unit of risk. Starbucks is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 52,752 in Starbucks on August 31, 2024 and sell it today you would earn a total of 8,362 from holding Starbucks or generate 15.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
BTG Pactual Logstica vs. Starbucks
Performance |
| Timeline |
| BTG Pactual Logstica |
| Starbucks |
BTG Pactual and Starbucks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTG Pactual and Starbucks
The main advantage of trading using opposite BTG Pactual and Starbucks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTG Pactual position performs unexpectedly, Starbucks 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 Starbucks will offset losses from the drop in Starbucks' 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 |
| Starbucks vs. Monster Beverage | Starbucks vs. Micron Technology | Starbucks vs. Marvell Technology | Starbucks vs. Telecomunicaes Brasileiras 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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