Correlation Between SLC Agrcola and BTG Pactual
Can any of the company-specific risk be diversified away by investing in both SLC Agrcola 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 SLC Agrcola and BTG Pactual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SLC Agrcola SA and BTG Pactual Logstica, you can compare the effects of market volatilities on SLC Agrcola 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 SLC Agrcola with a short position of BTG Pactual. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLC Agrcola and BTG Pactual.
Diversification Opportunities for SLC Agrcola and BTG Pactual
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SLC and BTG is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding SLC Agrcola SA 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 SLC Agrcola 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 SLC Agrcola SA 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 SLC Agrcola i.e., SLC Agrcola and BTG Pactual go up and down completely randomly.
Pair Corralation between SLC Agrcola and BTG Pactual
Assuming the 90 days trading horizon SLC Agrcola SA is expected to under-perform the BTG Pactual. In addition to that, SLC Agrcola is 1.87 times more volatile than BTG Pactual Logstica. It trades about -0.1 of its total potential returns per unit of risk. BTG Pactual Logstica is currently generating about 0.13 per unit of volatility. If you would invest 9,570 in BTG Pactual Logstica on August 24, 2024 and sell it today you would earn a total of 160.00 from holding BTG Pactual Logstica or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.0% |
| Values | Daily Returns |
SLC Agrcola SA vs. BTG Pactual Logstica
Performance |
| Timeline |
| SLC Agrcola SA |
| BTG Pactual Logstica |
SLC Agrcola and BTG Pactual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLC Agrcola and BTG Pactual
The main advantage of trading using opposite SLC Agrcola and BTG Pactual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLC Agrcola 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.| SLC Agrcola vs. BrasilAgro Companhia | SLC Agrcola vs. So Martinho SA | SLC Agrcola vs. Marfrig Global Foods | SLC Agrcola vs. Minerva SA |
| 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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