Correlation Between Companhia Paranaense and BTG Pactual
Can any of the company-specific risk be diversified away by investing in both Companhia Paranaense 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 Companhia Paranaense and BTG Pactual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Companhia Paranaense de and BTG Pactual Logstica, you can compare the effects of market volatilities on Companhia Paranaense 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 Companhia Paranaense with a short position of BTG Pactual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Paranaense and BTG Pactual.
Diversification Opportunities for Companhia Paranaense and BTG Pactual
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Companhia and BTG is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Paranaense de 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 Companhia Paranaense 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 Companhia Paranaense de 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 Companhia Paranaense i.e., Companhia Paranaense and BTG Pactual go up and down completely randomly.
Pair Corralation between Companhia Paranaense and BTG Pactual
Assuming the 90 days trading horizon Companhia Paranaense de is expected to under-perform the BTG Pactual. In addition to that, Companhia Paranaense is 5.96 times more volatile than BTG Pactual Logstica. It trades about -0.01 of its total potential returns per unit of risk. BTG Pactual Logstica is currently generating about 0.03 per unit of volatility. If you would invest 9,695 in BTG Pactual Logstica on August 23, 2024 and sell it today you would earn a total of 35.00 from holding BTG Pactual Logstica or generate 0.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Companhia Paranaense de vs. BTG Pactual Logstica
Performance |
| Timeline |
| Companhia Paranaense |
| BTG Pactual Logstica |
Companhia Paranaense and BTG Pactual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Companhia Paranaense and BTG Pactual
The main advantage of trading using opposite Companhia Paranaense and BTG Pactual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Paranaense 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.| Companhia Paranaense vs. Companhia Paranaense de | Companhia Paranaense vs. Centrais Eltricas de | Companhia Paranaense vs. Companhia Energtica de | Companhia Paranaense vs. CTEEP Companhia |
| 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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