Correlation Between Btg Pactual and Nu Renda

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

By analyzing existing cross correlation between Btg Pactual Real and Nu Renda Ibov, you can compare the effects of market volatilities on Btg Pactual and Nu Renda 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 Nu Renda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Btg Pactual and Nu Renda.

Diversification Opportunities for Btg Pactual and Nu Renda

0.33

Correlation Coefficient

Btg Pactual  Nu Renda

Weak diversification

The 3 months correlation between Btg and NDIV11 is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Btg Pactual Real and Nu Renda Ibov in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nu Renda Ibov 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 Real are associated (or correlated) with Nu Renda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nu Renda Ibov has no effect on the direction of Btg Pactual i.e., Btg Pactual and Nu Renda go up and down completely randomly.

Pair Corralation between Btg Pactual and Nu Renda

Assuming the 90 days trading horizon Btg Pactual is expected to generate 4.83 times less return on investment than Nu Renda. In addition to that, Btg Pactual is 1.31 times more volatile than Nu Renda Ibov. It trades about 0.02 of its total potential returns per unit of risk. Nu Renda Ibov is currently generating about 0.14 per unit of volatility. If you would invest  9,941  in Nu Renda Ibov on December 22, 2024 and sell it today you would earn a total of  904.00  from holding Nu Renda Ibov or generate 9.09% return on investment over 90 days.

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

Btg Pactual Real  vs.  Nu Renda Ibov

Btg Pactual Real

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Btg Pactual Real are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong technical indicators, Btg Pactual is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nu Renda Ibov

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nu Renda Ibov are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak forward indicators, Nu Renda may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Btg Pactual and Nu Renda

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

The idea behind Btg Pactual Real and Nu Renda Ibov 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.