Correlation Between HEDGE Brasil and BTG Pactual
Can any of the company-specific risk be diversified away by investing in both HEDGE Brasil 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 HEDGE Brasil and BTG Pactual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HEDGE Brasil Shopping and BTG Pactual Logstica, you can compare the effects of market volatilities on HEDGE Brasil 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 HEDGE Brasil with a short position of BTG Pactual. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEDGE Brasil and BTG Pactual.
Diversification Opportunities for HEDGE Brasil and BTG Pactual
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HEDGE and BTG is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding HEDGE Brasil Shopping 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 HEDGE Brasil 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 HEDGE Brasil Shopping 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 HEDGE Brasil i.e., HEDGE Brasil and BTG Pactual go up and down completely randomly.
Pair Corralation between HEDGE Brasil and BTG Pactual
Assuming the 90 days trading horizon HEDGE Brasil Shopping is expected to generate 1.1 times more return on investment than BTG Pactual. However, HEDGE Brasil is 1.1 times more volatile than BTG Pactual Logstica. It trades about 0.03 of its potential returns per unit of risk. BTG Pactual Logstica is currently generating about 0.02 per unit of risk. If you would invest 17,439 in HEDGE Brasil Shopping on September 2, 2024 and sell it today you would earn a total of 1,862 from holding HEDGE Brasil Shopping or generate 10.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HEDGE Brasil Shopping vs. BTG Pactual Logstica
Performance |
| Timeline |
| HEDGE Brasil Shopping |
| BTG Pactual Logstica |
HEDGE Brasil and BTG Pactual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HEDGE Brasil and BTG Pactual
The main advantage of trading using opposite HEDGE Brasil and BTG Pactual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEDGE Brasil 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.| HEDGE Brasil vs. BTG Pactual Logstica | HEDGE Brasil vs. Plano Plano Desenvolvimento | HEDGE Brasil vs. Cable One | HEDGE Brasil vs. ATMA Participaes SA |
| BTG Pactual vs. Plano Plano Desenvolvimento | BTG Pactual vs. Cable One | BTG Pactual vs. ATMA Participaes SA | BTG Pactual vs. British American Tobacco |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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