Correlation Between ASA METROPOLIS and BTG Pactual

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

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

Diversification Opportunities for ASA METROPOLIS and BTG Pactual

-0.17

Correlation Coefficient

ASA METROPOLIS  BTG Pactual

Good diversification

The 3 months correlation between ASA and BTG is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding ASA METROPOLIS FUNDO 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 ASA METROPOLIS 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 ASA METROPOLIS FUNDO 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 ASA METROPOLIS i.e., ASA METROPOLIS and BTG Pactual go up and down completely randomly.

Pair Corralation between ASA METROPOLIS and BTG Pactual

Assuming the 90 days trading horizon ASA METROPOLIS FUNDO is expected to generate 3.35 times more return on investment than BTG Pactual. However, ASA METROPOLIS is 3.35 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 0.07 per unit of risk. If you would invest  3,500  in ASA METROPOLIS FUNDO on December 4, 2024 and sell it today you would earn a total of  100.00  from holding ASA METROPOLIS FUNDO or generate 2.86% return on investment over 90 days.

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

ASA METROPOLIS FUNDO  vs.  BTG Pactual Logstica

ASA METROPOLIS FUNDO

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ASA METROPOLIS FUNDO are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak primary indicators, ASA METROPOLIS may actually be approaching a critical reversion point that can send shares even higher in April 2025.

BTG Pactual Logstica

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BTG Pactual Logstica are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak essential indicators, BTG Pactual may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with ASA METROPOLIS and BTG Pactual

The main advantage of trading using opposite ASA METROPOLIS and BTG Pactual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASA METROPOLIS 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 ASA METROPOLIS FUNDO 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.