Correlation Between BTG Pactual and Riza Akin

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

Diversification Opportunities for BTG Pactual and Riza Akin

0.82

Correlation Coefficient

BTG Pactual  Riza Akin

Very poor diversification

The 3 months correlation between BTG and Riza is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding BTG Pactual Logstica and Riza Akin Fundo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Riza Akin 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 Riza Akin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Riza Akin Fundo has no effect on the direction of BTG Pactual i.e., BTG Pactual and Riza Akin go up and down completely randomly.

Pair Corralation between BTG Pactual and Riza Akin

Assuming the 90 days trading horizon BTG Pactual Logstica is expected to generate 1.74 times more return on investment than Riza Akin. However, BTG Pactual is 1.74 times more volatile than Riza Akin Fundo. It trades about -0.15 of its potential returns per unit of risk. Riza Akin Fundo is currently generating about -0.35 per unit of risk. If you would invest  9,643  in BTG Pactual Logstica on September 16, 2024 and sell it today you would lose (555.00) from holding BTG Pactual Logstica or give up 5.76% 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.  Riza Akin Fundo

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 uncertain 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.

Riza Akin Fundo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Riza Akin Fundo has generated negative risk-adjusted returns adding no value to fund investors. Despite latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with BTG Pactual and Riza Akin

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

The idea behind BTG Pactual Logstica and Riza Akin 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 Transaction History module to view history of all your transactions and understand their impact on performance.