Correlation Between Unipar Carbocloro and Banco BTG
Can any of the company-specific risk be diversified away by investing in both Unipar Carbocloro and Banco BTG 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 Unipar Carbocloro and Banco BTG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unipar Carbocloro SA and Banco BTG Pactual, you can compare the effects of market volatilities on Unipar Carbocloro and Banco BTG 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 Unipar Carbocloro with a short position of Banco BTG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unipar Carbocloro and Banco BTG.
Diversification Opportunities for Unipar Carbocloro and Banco BTG
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Unipar and Banco is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Unipar Carbocloro SA and Banco BTG Pactual in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco BTG Pactual and Unipar Carbocloro 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 Unipar Carbocloro SA are associated (or correlated) with Banco BTG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco BTG Pactual has no effect on the direction of Unipar Carbocloro i.e., Unipar Carbocloro and Banco BTG go up and down completely randomly.
Pair Corralation between Unipar Carbocloro and Banco BTG
Assuming the 90 days trading horizon Unipar Carbocloro SA is expected to generate 1.78 times more return on investment than Banco BTG. However, Unipar Carbocloro is 1.78 times more volatile than Banco BTG Pactual. It trades about 0.3 of its potential returns per unit of risk. Banco BTG Pactual is currently generating about -0.09 per unit of risk. If you would invest 4,185 in Unipar Carbocloro SA on September 2, 2024 and sell it today you would earn a total of 1,015 from holding Unipar Carbocloro SA or generate 24.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unipar Carbocloro SA vs. Banco BTG Pactual
Performance |
| Timeline |
| Unipar Carbocloro |
| Banco BTG Pactual |
Unipar Carbocloro and Banco BTG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unipar Carbocloro and Banco BTG
The main advantage of trading using opposite Unipar Carbocloro and Banco BTG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unipar Carbocloro position performs unexpectedly, Banco BTG 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 Banco BTG will offset losses from the drop in Banco BTG's long position.| Unipar Carbocloro vs. Transmissora Aliana de | Unipar Carbocloro vs. CTEEP Companhia | Unipar Carbocloro vs. Braskem SA | Unipar Carbocloro vs. Cia de Ferro |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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