Correlation Between BTG Pactual and HALI34

Can any of the company-specific risk be diversified away by investing in both BTG Pactual and HALI34 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 HALI34 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 HALI34, you can compare the effects of market volatilities on BTG Pactual and HALI34 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 HALI34. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTG Pactual and HALI34.

Diversification Opportunities for BTG Pactual and HALI34

-0.77

Correlation Coefficient

BTG Pactual  HALI34

Pay attention - limited upside

The 3 months correlation between BTG and HALI34 is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding BTG Pactual Logstica and HALI34 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HALI34 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 HALI34. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HALI34 has no effect on the direction of BTG Pactual i.e., BTG Pactual and HALI34 go up and down completely randomly.

Pair Corralation between BTG Pactual and HALI34

Assuming the 90 days trading horizon BTG Pactual Logstica is expected to under-perform the HALI34. But the fund apears to be less risky and, when comparing its historical volatility, BTG Pactual Logstica is 2.41 times less risky than HALI34. The fund trades about -0.13 of its potential returns per unit of risk. The HALI34 is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  16,422  in HALI34 on September 23, 2024 and sell it today you would lose (646.00) from holding HALI34 or give up 3.93% of portfolio value over 90 days.

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

BTG Pactual Logstica  vs.  HALI34

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.

HALI34

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HALI34 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, HALI34 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 HALI34

The main advantage of trading using opposite BTG Pactual and HALI34 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTG Pactual position performs unexpectedly, HALI34 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 HALI34 will offset losses from the drop in HALI34's long position.

The idea behind BTG Pactual Logstica and HALI34 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.