Correlation Between IShares Trust and BTG Pactual
Can any of the company-specific risk be diversified away by investing in both IShares Trust and BTG Pactual 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 IShares Trust and BTG Pactual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Trust and BTG Pactual Logstica, you can compare the effects of market volatilities on IShares Trust and BTG Pactual 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 IShares Trust with a short position of BTG Pactual. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and BTG Pactual.
Diversification Opportunities for IShares Trust and BTG Pactual
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and BTG is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and BTG Pactual Logstica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTG Pactual Logstica and IShares Trust 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 iShares Trust are associated (or correlated) with BTG Pactual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTG Pactual Logstica has no effect on the direction of IShares Trust i.e., IShares Trust and BTG Pactual go up and down completely randomly.
Pair Corralation between IShares Trust and BTG Pactual
Assuming the 90 days trading horizon IShares Trust is expected to generate 1.11 times less return on investment than BTG Pactual. In addition to that, IShares Trust is 1.81 times more volatile than BTG Pactual Logstica. It trades about 0.07 of its total potential returns per unit of risk. BTG Pactual Logstica is currently generating about 0.13 per unit of volatility. If you would invest 9,570 in BTG Pactual Logstica on August 24, 2024 and sell it today you would earn a total of 160.00 from holding BTG Pactual Logstica or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
iShares Trust vs. BTG Pactual Logstica
Performance |
| Timeline |
| iShares Trust |
| BTG Pactual Logstica |
IShares Trust and BTG Pactual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Trust and BTG Pactual
The main advantage of trading using opposite IShares Trust and BTG Pactual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust position performs unexpectedly, BTG Pactual 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 BTG Pactual will offset losses from the drop in BTG Pactual's long position.| IShares Trust vs. iShares BMFBovespa Small | IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. iShares iShares |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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