Correlation Between BTG Pactual and Itau Fundo
Can any of the company-specific risk be diversified away by investing in both BTG Pactual and Itau Fundo 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 Itau Fundo 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 Itau Fundo De, you can compare the effects of market volatilities on BTG Pactual and Itau Fundo 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 Itau Fundo. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTG Pactual and Itau Fundo.
Diversification Opportunities for BTG Pactual and Itau Fundo
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BTG and Itau is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding BTG Pactual Logstica and Itau Fundo De in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itau Fundo De 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 Itau Fundo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itau Fundo De has no effect on the direction of BTG Pactual i.e., BTG Pactual and Itau Fundo go up and down completely randomly.
Pair Corralation between BTG Pactual and Itau Fundo
Assuming the 90 days trading horizon BTG Pactual Logstica is expected to generate 1.37 times more return on investment than Itau Fundo. However, BTG Pactual is 1.37 times more volatile than Itau Fundo De. It trades about -0.13 of its potential returns per unit of risk. Itau Fundo De is currently generating about -0.2 per unit of risk. If you would invest 10,122 in BTG Pactual Logstica on September 10, 2024 and sell it today you would lose (992.00) from holding BTG Pactual Logstica or give up 9.8% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
BTG Pactual Logstica vs. Itau Fundo De
Performance |
Timeline |
BTG Pactual Logstica |
Itau Fundo De |
BTG Pactual and Itau Fundo Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BTG Pactual and Itau Fundo
The main advantage of trading using opposite BTG Pactual and Itau Fundo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTG Pactual position performs unexpectedly, Itau Fundo 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 Itau Fundo will offset losses from the drop in Itau Fundo's long position.BTG Pactual vs. BTG Pactual Teva | BTG Pactual vs. BTG PACTUAL CRDITO | BTG Pactual vs. FDO INV IMOB | BTG Pactual vs. SUPREMO FUNDO DE |
Itau Fundo vs. Itau Total Return | Itau Fundo vs. FDO INV IMOB | Itau Fundo vs. SUPREMO FUNDO DE | Itau Fundo vs. Real Estate Investment |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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