Correlation Between BTG Pactual and Vbi Consumo

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

Diversification Opportunities for BTG Pactual and Vbi Consumo

-0.67

Correlation Coefficient

BTG Pactual  Vbi Consumo

Excellent diversification

The 3 months correlation between BTG and Vbi is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding BTG Pactual Logstica and Vbi Consumo Essencial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vbi Consumo Essencial 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 Vbi Consumo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vbi Consumo Essencial has no effect on the direction of BTG Pactual i.e., BTG Pactual and Vbi Consumo go up and down completely randomly.

Pair Corralation between BTG Pactual and Vbi Consumo

Assuming the 90 days trading horizon BTG Pactual Logstica is expected to generate 0.16 times more return on investment than Vbi Consumo. However, BTG Pactual Logstica is 6.35 times less risky than Vbi Consumo. It trades about -0.02 of its potential returns per unit of risk. Vbi Consumo Essencial is currently generating about -0.06 per unit of risk. If you would invest  10,071  in BTG Pactual Logstica on September 28, 2024 and sell it today you would lose (618.00) from holding BTG Pactual Logstica or give up 6.14% of portfolio value over 90 days.

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

BTG Pactual Logstica  vs.  Vbi Consumo Essencial

BTG Pactual Logstica

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BTG Pactual Logstica has generated negative risk-adjusted returns adding no value to fund investors. 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.

Vbi Consumo Essencial

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vbi Consumo Essencial are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong fundamental drivers, Vbi Consumo is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BTG Pactual and Vbi Consumo

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

The idea behind BTG Pactual Logstica and Vbi Consumo Essencial 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.