Correlation Between Bradespar and BTG Pactual

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

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

Diversification Opportunities for Bradespar and BTG Pactual

-0.35

Correlation Coefficient

Bradespar  BTG Pactual

Very good diversification

The 3 months correlation between Bradespar and BTG is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Bradespar SA 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 Bradespar 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 Bradespar SA 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 Bradespar i.e., Bradespar and BTG Pactual go up and down completely randomly.

Pair Corralation between Bradespar and BTG Pactual

Assuming the 90 days trading horizon Bradespar SA is expected to under-perform the BTG Pactual. But the stock apears to be less risky and, when comparing its historical volatility, Bradespar SA is 1.15 times less risky than BTG Pactual. The stock trades about -0.1 of its potential returns per unit of risk. The BTG Pactual Logstica is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  9,350  in BTG Pactual Logstica on December 2, 2024 and sell it today you would earn a total of  148.00  from holding BTG Pactual Logstica or generate 1.58% return on investment over 90 days.

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

Bradespar SA  vs.  BTG Pactual Logstica

Bradespar SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bradespar SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

BTG Pactual Logstica

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BTG Pactual Logstica are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. 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.

Pair Trading with Bradespar and BTG Pactual

The main advantage of trading using opposite Bradespar and BTG Pactual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bradespar 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 Bradespar SA 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.