Correlation Between Telefonaktiebolaget and BTG Pactual
Can any of the company-specific risk be diversified away by investing in both Telefonaktiebolaget 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 Telefonaktiebolaget and BTG Pactual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telefonaktiebolaget LM Ericsson and BTG Pactual Logstica, you can compare the effects of market volatilities on Telefonaktiebolaget 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 Telefonaktiebolaget with a short position of BTG Pactual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telefonaktiebolaget and BTG Pactual.
Diversification Opportunities for Telefonaktiebolaget and BTG Pactual
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telefonaktiebolaget and BTG is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Telefonaktiebolaget LM Ericsso 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 Telefonaktiebolaget 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 Telefonaktiebolaget LM Ericsson 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 Telefonaktiebolaget i.e., Telefonaktiebolaget and BTG Pactual go up and down completely randomly.
Pair Corralation between Telefonaktiebolaget and BTG Pactual
Assuming the 90 days trading horizon Telefonaktiebolaget LM Ericsson is expected to generate 1.06 times more return on investment than BTG Pactual. However, Telefonaktiebolaget is 1.06 times more volatile than BTG Pactual Logstica. It trades about 0.08 of its potential returns per unit of risk. BTG Pactual Logstica is currently generating about -0.06 per unit of risk. If you would invest 2,440 in Telefonaktiebolaget LM Ericsson on October 26, 2024 and sell it today you would earn a total of 160.00 from holding Telefonaktiebolaget LM Ericsson or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telefonaktiebolaget LM Ericsso vs. BTG Pactual Logstica
Performance |
| Timeline |
| Telefonaktiebolaget |
| BTG Pactual Logstica |
Telefonaktiebolaget and BTG Pactual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telefonaktiebolaget and BTG Pactual
The main advantage of trading using opposite Telefonaktiebolaget and BTG Pactual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telefonaktiebolaget 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.| Telefonaktiebolaget vs. SK Telecom Co, | Telefonaktiebolaget vs. Check Point Software | Telefonaktiebolaget vs. G2D Investments | Telefonaktiebolaget vs. Agilent Technologies |
| BTG Pactual vs. Btg Pactual Real | BTG Pactual vs. Fundo Investimento Imobiliario | BTG Pactual vs. KILIMA VOLKANO RECEBVEIS | BTG Pactual vs. DEVANT PROPERTIES FUNDO |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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