Correlation Between Banco Pan and BTG Pactual

Can any of the company-specific risk be diversified away by investing in both Banco Pan 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 Banco Pan and BTG Pactual into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Banco Pan SA and BTG Pactual Logstica, you can compare the effects of market volatilities on Banco Pan 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 Banco Pan with a short position of BTG Pactual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Pan and BTG Pactual.

Diversification Opportunities for Banco Pan and BTG Pactual

0.79

Correlation Coefficient

Banco Pan  BTG Pactual

Poor diversification

The 3 months correlation between Banco and BTG is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Banco Pan 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 Banco Pan 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 Banco Pan 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 Banco Pan i.e., Banco Pan and BTG Pactual go up and down completely randomly.

Pair Corralation between Banco Pan and BTG Pactual

Assuming the 90 days trading horizon Banco Pan SA is expected to generate 2.87 times more return on investment than BTG Pactual. However, Banco Pan is 2.87 times more volatile than BTG Pactual Logstica. It trades about 0.03 of its potential returns per unit of risk. BTG Pactual Logstica is currently generating about 0.01 per unit of risk. If you would invest  552.00  in Banco Pan SA on September 28, 2024 and sell it today you would earn a total of  114.00  from holding Banco Pan SA or generate 20.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.19%
Values	Daily Returns

Banco Pan SA  vs.  BTG Pactual Logstica

Banco Pan SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Banco Pan SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Preferred Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

BTG Pactual Logstica

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BTG Pactual Logstica has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong essential indicators, BTG Pactual is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Banco Pan and BTG Pactual

The main advantage of trading using opposite Banco Pan and BTG Pactual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Pan 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.

The idea behind Banco Pan SA and BTG Pactual Logstica pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..