Correlation Between Clave Indices and Banco BTG
Can any of the company-specific risk be diversified away by investing in both Clave Indices and Banco BTG 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 Clave Indices and Banco BTG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clave Indices De and Banco BTG Pactual, you can compare the effects of market volatilities on Clave Indices and Banco BTG 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 Clave Indices with a short position of Banco BTG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clave Indices and Banco BTG.
Diversification Opportunities for Clave Indices and Banco BTG
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Clave and Banco is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Clave Indices De and Banco BTG Pactual in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco BTG Pactual and Clave Indices 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 Clave Indices De are associated (or correlated) with Banco BTG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco BTG Pactual has no effect on the direction of Clave Indices i.e., Clave Indices and Banco BTG go up and down completely randomly.
Pair Corralation between Clave Indices and Banco BTG
Assuming the 90 days trading horizon Clave Indices De is expected to under-perform the Banco BTG. But the stock apears to be less risky and, when comparing its historical volatility, Clave Indices De is 2.97 times less risky than Banco BTG. The stock trades about -0.2 of its potential returns per unit of risk. The Banco BTG Pactual is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 1,532 in Banco BTG Pactual on August 31, 2024 and sell it today you would lose (66.00) from holding Banco BTG Pactual or give up 4.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clave Indices De vs. Banco BTG Pactual
Performance |
| Timeline |
| Clave Indices De |
| Banco BTG Pactual |
Clave Indices and Banco BTG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clave Indices and Banco BTG
The main advantage of trading using opposite Clave Indices and Banco BTG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clave Indices position performs unexpectedly, Banco BTG 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 Banco BTG will offset losses from the drop in Banco BTG's long position.| Clave Indices vs. Taiwan Semiconductor Manufacturing | Clave Indices vs. Alibaba Group Holding | Clave Indices vs. Microsoft | Clave Indices vs. Alphabet |
| Banco BTG vs. Banco BTG Pactual | Banco BTG vs. Banco BTG Pactual | Banco BTG vs. Banco Pan SA | Banco BTG vs. Banco Santander 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |