Correlation Between BTG Pactual and Banco Santander

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

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

Diversification Opportunities for BTG Pactual and Banco Santander

-0.76

Correlation Coefficient

BTG Pactual  Banco Santander

Pay attention - limited upside

The 3 months correlation between BTG and Banco is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding BTG Pactual Logstica and Banco Santander SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Santander SA and BTG Pactual 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 BTG Pactual Logstica are associated (or correlated) with Banco Santander. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Santander SA has no effect on the direction of BTG Pactual i.e., BTG Pactual and Banco Santander go up and down completely randomly.

Pair Corralation between BTG Pactual and Banco Santander

Assuming the 90 days trading horizon BTG Pactual Logstica is expected to under-perform the Banco Santander. But the fund apears to be less risky and, when comparing its historical volatility, BTG Pactual Logstica is 2.09 times less risky than Banco Santander. The fund trades about -0.04 of its potential returns per unit of risk. The Banco Santander SA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,456  in Banco Santander SA on September 19, 2024 and sell it today you would earn a total of  403.00  from holding Banco Santander SA or generate 16.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.43%
Values	Daily Returns

BTG Pactual Logstica  vs.  Banco Santander SA

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 latest uncertain performance, the Fund's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Banco Santander SA

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Banco Santander SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Banco Santander is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BTG Pactual and Banco Santander

The main advantage of trading using opposite BTG Pactual and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTG Pactual position performs unexpectedly, Banco Santander 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 Santander will offset losses from the drop in Banco Santander's long position.

The idea behind BTG Pactual Logstica and Banco Santander SA 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..