Correlation Between Cable One and BTG Pactual
Can any of the company-specific risk be diversified away by investing in both Cable One 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 Cable One and BTG Pactual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cable One and BTG Pactual Logstica, you can compare the effects of market volatilities on Cable One 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 Cable One with a short position of BTG Pactual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cable One and BTG Pactual.
Diversification Opportunities for Cable One and BTG Pactual
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cable and BTG is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Cable One 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 Cable One 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 Cable One 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 Cable One i.e., Cable One and BTG Pactual go up and down completely randomly.
Pair Corralation between Cable One and BTG Pactual
Assuming the 90 days trading horizon Cable One is expected to generate 2.93 times more return on investment than BTG Pactual. However, Cable One is 2.93 times more volatile than BTG Pactual Logstica. It trades about 0.47 of its potential returns per unit of risk. BTG Pactual Logstica is currently generating about 0.13 per unit of risk. If you would invest 970.00 in Cable One on August 24, 2024 and sell it today you would earn a total of 203.00 from holding Cable One or generate 20.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.0% |
| Values | Daily Returns |
Cable One vs. BTG Pactual Logstica
Performance |
| Timeline |
| Cable One |
| BTG Pactual Logstica |
Cable One and BTG Pactual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cable One and BTG Pactual
The main advantage of trading using opposite Cable One and BTG Pactual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cable One 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.| Cable One vs. Credit Acceptance | Cable One vs. Sumitomo Mitsui Financial | Cable One vs. Mitsubishi UFJ Financial | Cable One vs. Micron Technology |
| BTG Pactual vs. Energisa SA | BTG Pactual vs. Plano Plano Desenvolvimento | BTG Pactual vs. Companhia Habitasul de | BTG Pactual vs. The Procter Gamble |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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