Correlation Between BTG Pactual and United States
Can any of the company-specific risk be diversified away by investing in both BTG Pactual and United States 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 United States 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 United States Steel, you can compare the effects of market volatilities on BTG Pactual and United States 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 United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTG Pactual and United States.
Diversification Opportunities for BTG Pactual and United States
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BTG and United is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding BTG Pactual Logstica and United States Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Steel 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Steel has no effect on the direction of BTG Pactual i.e., BTG Pactual and United States go up and down completely randomly.
Pair Corralation between BTG Pactual and United States
Assuming the 90 days trading horizon BTG Pactual is expected to generate 12.56 times less return on investment than United States. But when comparing it to its historical volatility, BTG Pactual Logstica is 4.97 times less risky than United States. It trades about 0.02 of its potential returns per unit of risk. United States Steel is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 13,429 in United States Steel on August 29, 2024 and sell it today you would earn a total of 9,125 from holding United States Steel or generate 67.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.77% |
| Values | Daily Returns |
BTG Pactual Logstica vs. United States Steel
Performance |
| Timeline |
| BTG Pactual Logstica |
| United States Steel |
BTG Pactual and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTG Pactual and United States
The main advantage of trading using opposite BTG Pactual and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTG Pactual position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| BTG Pactual vs. Real Estate Investment | BTG Pactual vs. NAVI CRDITO IMOBILIRIO | BTG Pactual vs. LIFE CAPITAL PARTNERS | BTG Pactual vs. Cshg Jhsf Prime |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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