Correlation Between BTG Pactual and IShares BMFBovespa
Can any of the company-specific risk be diversified away by investing in both BTG Pactual and IShares BMFBovespa 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 IShares BMFBovespa 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 iShares BMFBovespa Small, you can compare the effects of market volatilities on BTG Pactual and IShares BMFBovespa 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 IShares BMFBovespa. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTG Pactual and IShares BMFBovespa.
Diversification Opportunities for BTG Pactual and IShares BMFBovespa
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BTG and IShares is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding BTG Pactual Logstica and iShares BMFBovespa Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares BMFBovespa Small 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 IShares BMFBovespa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares BMFBovespa Small has no effect on the direction of BTG Pactual i.e., BTG Pactual and IShares BMFBovespa go up and down completely randomly.
Pair Corralation between BTG Pactual and IShares BMFBovespa
Assuming the 90 days trading horizon BTG Pactual Logstica is expected to generate 0.37 times more return on investment than IShares BMFBovespa. However, BTG Pactual Logstica is 2.69 times less risky than IShares BMFBovespa. It trades about -0.07 of its potential returns per unit of risk. iShares BMFBovespa Small is currently generating about -0.09 per unit of risk. If you would invest 9,603 in BTG Pactual Logstica on September 1, 2024 and sell it today you would lose (103.00) from holding BTG Pactual Logstica or give up 1.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTG Pactual Logstica vs. iShares BMFBovespa Small
Performance |
| Timeline |
| BTG Pactual Logstica |
| iShares BMFBovespa Small |
BTG Pactual and IShares BMFBovespa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTG Pactual and IShares BMFBovespa
The main advantage of trading using opposite BTG Pactual and IShares BMFBovespa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTG Pactual position performs unexpectedly, IShares BMFBovespa 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 IShares BMFBovespa will offset losses from the drop in IShares BMFBovespa's long position.| BTG Pactual vs. Fundo Investimento Imobiliario | BTG Pactual vs. KILIMA VOLKANO RECEBVEIS | BTG Pactual vs. DEVANT PROPERTIES FUNDO | BTG Pactual vs. SPARTA FIAGRO FDO |
| IShares BMFBovespa vs. iShares Trust | IShares BMFBovespa vs. iShares Trust | IShares BMFBovespa vs. iShares Trust | IShares BMFBovespa vs. iShares iShares |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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