Correlation Between Banco BTG and Bank Of
Can any of the company-specific risk be diversified away by investing in both Banco BTG and Bank Of 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 Banco BTG and Bank Of into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco BTG Pactual and The Bank of, you can compare the effects of market volatilities on Banco BTG and Bank Of 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 Banco BTG with a short position of Bank Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco BTG and Bank Of.
Diversification Opportunities for Banco BTG and Bank Of
Very weak diversification
The 3 months correlation between Banco and Bank is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Banco BTG Pactual and The Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Bank and Banco BTG 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 Banco BTG Pactual are associated (or correlated) with Bank Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Bank has no effect on the direction of Banco BTG i.e., Banco BTG and Bank Of go up and down completely randomly.
Pair Corralation between Banco BTG and Bank Of
Assuming the 90 days trading horizon Banco BTG Pactual is expected to generate 1.44 times more return on investment than Bank Of. However, Banco BTG is 1.44 times more volatile than The Bank of. It trades about 0.02 of its potential returns per unit of risk. The Bank of is currently generating about 0.02 per unit of risk. If you would invest 773.00 in Banco BTG Pactual on November 29, 2024 and sell it today you would earn a total of 7.00 from holding Banco BTG Pactual or generate 0.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 83.33% |
Values | Daily Returns |
Banco BTG Pactual vs. The Bank of
Performance |
Timeline |
Banco BTG Pactual |
The Bank |
Banco BTG and Bank Of Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Banco BTG and Bank Of
The main advantage of trading using opposite Banco BTG and Bank Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco BTG position performs unexpectedly, Bank Of 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 Bank Of will offset losses from the drop in Bank Of's long position.Banco BTG vs. Banco BTG Pactual | Banco BTG vs. Banco BTG Pactual | Banco BTG vs. Banco Santander SA | Banco BTG vs. Banco Santander SA |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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