Correlation Between BTG Pactual and ASA METROPOLIS

Can any of the company-specific risk be diversified away by investing in both BTG Pactual and ASA METROPOLIS 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 ASA METROPOLIS 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 ASA METROPOLIS FUNDO, you can compare the effects of market volatilities on BTG Pactual and ASA METROPOLIS 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 ASA METROPOLIS. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTG Pactual and ASA METROPOLIS.

Diversification Opportunities for BTG Pactual and ASA METROPOLIS

0.46

Correlation Coefficient

BTG Pactual  ASA METROPOLIS

Very weak diversification

The 3 months correlation between BTG and ASA is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding BTG Pactual Logstica and ASA METROPOLIS FUNDO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASA METROPOLIS FUNDO 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 ASA METROPOLIS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASA METROPOLIS FUNDO has no effect on the direction of BTG Pactual i.e., BTG Pactual and ASA METROPOLIS go up and down completely randomly.

Pair Corralation between BTG Pactual and ASA METROPOLIS

Assuming the 90 days trading horizon BTG Pactual is expected to generate 1.83 times less return on investment than ASA METROPOLIS. But when comparing it to its historical volatility, BTG Pactual Logstica is 5.49 times less risky than ASA METROPOLIS. It trades about 0.09 of its potential returns per unit of risk. ASA METROPOLIS FUNDO is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  3,430  in ASA METROPOLIS FUNDO on December 27, 2024 and sell it today you would earn a total of  88.00  from holding ASA METROPOLIS FUNDO or generate 2.57% return on investment over 90 days.

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

BTG Pactual Logstica  vs.  ASA METROPOLIS FUNDO

BTG Pactual Logstica

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BTG Pactual Logstica are ranked lower than 7 (%) 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.

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.

Pair Trading with BTG Pactual and ASA METROPOLIS

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

The idea behind BTG Pactual Logstica and ASA METROPOLIS FUNDO 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.