Correlation Between Itau Fundo and BTG Pactual
Can any of the company-specific risk be diversified away by investing in both Itau Fundo 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 Itau Fundo and BTG Pactual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Itau Fundo De and BTG Pactual Logstica, you can compare the effects of market volatilities on Itau Fundo 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 Itau Fundo with a short position of BTG Pactual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Itau Fundo and BTG Pactual.
Diversification Opportunities for Itau Fundo and BTG Pactual
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Itau and BTG is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Itau Fundo 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 Itau Fundo 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 Itau Fundo 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 Itau Fundo i.e., Itau Fundo and BTG Pactual go up and down completely randomly.
Pair Corralation between Itau Fundo and BTG Pactual
Assuming the 90 days trading horizon Itau Fundo De is expected to generate 1.88 times more return on investment than BTG Pactual. However, Itau Fundo is 1.88 times more volatile than BTG Pactual Logstica. It trades about 0.16 of its potential returns per unit of risk. BTG Pactual Logstica is currently generating about 0.21 per unit of risk. If you would invest 8,802 in Itau Fundo De on November 29, 2024 and sell it today you would earn a total of 507.00 from holding Itau Fundo De or generate 5.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Itau Fundo De vs. BTG Pactual Logstica
Performance |
| Timeline |
| Itau Fundo De |
| BTG Pactual Logstica |
Itau Fundo and BTG Pactual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Itau Fundo and BTG Pactual
The main advantage of trading using opposite Itau Fundo and BTG Pactual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Itau Fundo 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.| Itau Fundo vs. Domo Fundo de | Itau Fundo vs. Aesapar Fundo de | Itau Fundo vs. Ourinvest Jpp Fundo | Itau Fundo vs. Loft II Fundo |
| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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