Correlation Between ConocoPhillips and Banco BTG
Can any of the company-specific risk be diversified away by investing in both ConocoPhillips 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 ConocoPhillips and Banco BTG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ConocoPhillips and Banco BTG Pactual, you can compare the effects of market volatilities on ConocoPhillips 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 ConocoPhillips with a short position of Banco BTG. Check out your portfolio center. Please also check ongoing floating volatility patterns of ConocoPhillips and Banco BTG.
Diversification Opportunities for ConocoPhillips and Banco BTG
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between ConocoPhillips and Banco is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding ConocoPhillips 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 ConocoPhillips 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 ConocoPhillips 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 ConocoPhillips i.e., ConocoPhillips and Banco BTG go up and down completely randomly.
Pair Corralation between ConocoPhillips and Banco BTG
Assuming the 90 days trading horizon ConocoPhillips is expected to generate 1.99 times less return on investment than Banco BTG. But when comparing it to its historical volatility, ConocoPhillips is 1.02 times less risky than Banco BTG. It trades about 0.03 of its potential returns per unit of risk. Banco BTG Pactual is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,176 in Banco BTG Pactual on August 30, 2024 and sell it today you would earn a total of 1,029 from holding Banco BTG Pactual or generate 47.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.0% |
| Values | Daily Returns |
ConocoPhillips vs. Banco BTG Pactual
Performance |
| Timeline |
| ConocoPhillips |
| Banco BTG Pactual |
ConocoPhillips and Banco BTG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ConocoPhillips and Banco BTG
The main advantage of trading using opposite ConocoPhillips and Banco BTG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ConocoPhillips 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.| ConocoPhillips vs. Deutsche Bank Aktiengesellschaft | ConocoPhillips vs. MAHLE Metal Leve | ConocoPhillips vs. SVB Financial Group | ConocoPhillips vs. Iron Mountain Incorporated |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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