Correlation Between BTG Pactual and Kinea Fundo

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

Diversification Opportunities for BTG Pactual and Kinea Fundo

0.87

Correlation Coefficient

BTG Pactual  Kinea Fundo

Very poor diversification

The 3 months correlation between BTG and Kinea is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding BTG Pactual Logstica and Kinea Fundo Fundos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinea Fundo Fundos 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 Kinea Fundo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinea Fundo Fundos has no effect on the direction of BTG Pactual i.e., BTG Pactual and Kinea Fundo go up and down completely randomly.

Pair Corralation between BTG Pactual and Kinea Fundo

Assuming the 90 days trading horizon BTG Pactual Logstica is expected to generate 1.02 times more return on investment than Kinea Fundo. However, BTG Pactual is 1.02 times more volatile than Kinea Fundo Fundos. It trades about -0.12 of its potential returns per unit of risk. Kinea Fundo Fundos is currently generating about -0.18 per unit of risk. If you would invest  10,000  in BTG Pactual Logstica on September 14, 2024 and sell it today you would lose (912.00) from holding BTG Pactual Logstica or give up 9.12% of portfolio value over 90 days.

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

BTG Pactual Logstica  vs.  Kinea Fundo Fundos

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 latest weak performance, the Fund's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Kinea Fundo Fundos

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kinea Fundo Fundos has generated negative risk-adjusted returns adding no value to fund investors. Despite weak performance in the last few months, the Fund's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with BTG Pactual and Kinea Fundo

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

The idea behind BTG Pactual Logstica and Kinea Fundo Fundos 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..