Correlation Between BTG Pactual and Ser Educacional

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

Diversification Opportunities for BTG Pactual and Ser Educacional

0.5

Correlation Coefficient

BTG Pactual  Ser Educacional

Very weak diversification

The 3 months correlation between BTG and Ser is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding BTG Pactual Logstica and Ser Educacional Sa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ser Educacional Sa 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 Ser Educacional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ser Educacional Sa has no effect on the direction of BTG Pactual i.e., BTG Pactual and Ser Educacional go up and down completely randomly.

Pair Corralation between BTG Pactual and Ser Educacional

Assuming the 90 days trading horizon BTG Pactual Logstica is expected to under-perform the Ser Educacional. But the fund apears to be less risky and, when comparing its historical volatility, BTG Pactual Logstica is 5.21 times less risky than Ser Educacional. The fund trades about -0.01 of its potential returns per unit of risk. The Ser Educacional Sa is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  466.00  in Ser Educacional Sa on October 3, 2024 and sell it today you would lose (16.00) from holding Ser Educacional Sa or give up 3.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.49%
Values	Daily Returns

BTG Pactual Logstica  vs.  Ser Educacional Sa

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.

Ser Educacional Sa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ser Educacional Sa has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with BTG Pactual and Ser Educacional

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

The idea behind BTG Pactual Logstica and Ser Educacional Sa 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 Correlations module to find global opportunities by holding instruments from different markets.