Correlation Between BTG Pactual and Ishares Technology

Can any of the company-specific risk be diversified away by investing in both BTG Pactual and Ishares Technology 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 Ishares Technology 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 Ishares Technology ETF, you can compare the effects of market volatilities on BTG Pactual and Ishares Technology 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 Ishares Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTG Pactual and Ishares Technology.

Diversification Opportunities for BTG Pactual and Ishares Technology

-0.85

Correlation Coefficient

BTG Pactual  Ishares Technology

Pay attention - limited upside

The 3 months correlation between BTG and Ishares is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding BTG Pactual Logstica and Ishares Technology ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ishares Technology ETF 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 Ishares Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ishares Technology ETF has no effect on the direction of BTG Pactual i.e., BTG Pactual and Ishares Technology go up and down completely randomly.

Pair Corralation between BTG Pactual and Ishares Technology

Assuming the 90 days trading horizon BTG Pactual Logstica is expected to under-perform the Ishares Technology. In addition to that, BTG Pactual is 1.15 times more volatile than Ishares Technology ETF. It trades about -0.04 of its total potential returns per unit of risk. Ishares Technology ETF is currently generating about 0.26 per unit of volatility. If you would invest  2,349  in Ishares Technology ETF on September 30, 2024 and sell it today you would earn a total of  516.00  from holding Ishares Technology ETF or generate 21.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

BTG Pactual Logstica  vs.  Ishares Technology ETF

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.

Ishares Technology ETF

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ishares Technology ETF are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ishares Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BTG Pactual and Ishares Technology

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

The idea behind BTG Pactual Logstica and Ishares Technology ETF 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 Commodity Directory module to find actively traded commodities issued by global exchanges.