Correlation Between Basic Materials and Btg Pactual
Can any of the company-specific risk be diversified away by investing in both Basic Materials 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 Basic Materials and Btg Pactual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Basic Materials and Btg Pactual Real, you can compare the effects of market volatilities on Basic Materials 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 Basic Materials with a short position of Btg Pactual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basic Materials and Btg Pactual.
Diversification Opportunities for Basic Materials and Btg Pactual
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Basic and Btg is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Basic Materials and Btg Pactual Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Btg Pactual Real and Basic Materials 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 Basic Materials 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 Real has no effect on the direction of Basic Materials i.e., Basic Materials and Btg Pactual go up and down completely randomly.
Pair Corralation between Basic Materials and Btg Pactual
Assuming the 90 days trading horizon Basic Materials is expected to generate 1.02 times more return on investment than Btg Pactual. However, Basic Materials is 1.02 times more volatile than Btg Pactual Real. It trades about -0.5 of its potential returns per unit of risk. Btg Pactual Real is currently generating about -0.81 per unit of risk. If you would invest 577,239 in Basic Materials on October 14, 2024 and sell it today you would lose (51,904) from holding Basic Materials or give up 8.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Basic Materials vs. Btg Pactual Real
Performance |
| Timeline |
Basic Materials and Btg Pactual Volatility Contrast
Predicted Return Density |
| Returns |
Basic Materials
Pair trading matchups for Basic Materials
Btg Pactual Real
Pair trading matchups for Btg Pactual
Pair Trading with Basic Materials and Btg Pactual
The main advantage of trading using opposite Basic Materials and Btg Pactual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basic Materials 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.| Basic Materials vs. DENTSPLY SIRONA | Basic Materials vs. Monster Beverage | Basic Materials vs. STMicroelectronics NV | Basic Materials vs. Unifique Telecomunicaes SA |
| Btg Pactual vs. Energisa SA | Btg Pactual vs. BTG Pactual Logstica | Btg Pactual vs. Plano Plano Desenvolvimento | Btg Pactual vs. Ares Management |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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