Correlation Between Fundo Investec and BTG Pactual
Can any of the company-specific risk be diversified away by investing in both Fundo Investec 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 Fundo Investec and BTG Pactual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fundo Investec IMB and BTG Pactual Logstica, you can compare the effects of market volatilities on Fundo Investec 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 Fundo Investec with a short position of BTG Pactual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fundo Investec and BTG Pactual.
Diversification Opportunities for Fundo Investec and BTG Pactual
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fundo and BTG is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Fundo Investec IMB 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 Fundo Investec 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 Fundo Investec IMB 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 Fundo Investec i.e., Fundo Investec and BTG Pactual go up and down completely randomly.
Pair Corralation between Fundo Investec and BTG Pactual
Assuming the 90 days trading horizon Fundo Investec IMB is expected to under-perform the BTG Pactual. In addition to that, Fundo Investec is 3.81 times more volatile than BTG Pactual Logstica. It trades about -0.02 of its total potential returns per unit of risk. BTG Pactual Logstica is currently generating about 0.02 per unit of volatility. If you would invest 9,073 in BTG Pactual Logstica on September 2, 2024 and sell it today you would earn a total of 427.00 from holding BTG Pactual Logstica or generate 4.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fundo Investec IMB vs. BTG Pactual Logstica
Performance |
| Timeline |
| Fundo Investec IMB |
| BTG Pactual Logstica |
Fundo Investec and BTG Pactual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fundo Investec and BTG Pactual
The main advantage of trading using opposite Fundo Investec and BTG Pactual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fundo Investec 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.| Fundo Investec vs. BTG Pactual Logstica | Fundo Investec vs. Plano Plano Desenvolvimento | Fundo Investec vs. Cable One | Fundo Investec 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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