Correlation Between Vbi Consumo and BTG Pactual

Can any of the company-specific risk be diversified away by investing in both Vbi Consumo and BTG Pactual 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 Vbi Consumo and BTG Pactual into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vbi Consumo Essencial and BTG Pactual Logstica, you can compare the effects of market volatilities on Vbi Consumo and BTG Pactual 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 Vbi Consumo with a short position of BTG Pactual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vbi Consumo and BTG Pactual.

Diversification Opportunities for Vbi Consumo and BTG Pactual

-0.64

Correlation Coefficient

Vbi Consumo  BTG Pactual

Excellent diversification

The 3 months correlation between Vbi and BTG is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Vbi Consumo Essencial and BTG Pactual Logstica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTG Pactual Logstica and Vbi Consumo 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 Vbi Consumo Essencial are associated (or correlated) with BTG Pactual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTG Pactual Logstica has no effect on the direction of Vbi Consumo i.e., Vbi Consumo and BTG Pactual go up and down completely randomly.

Pair Corralation between Vbi Consumo and BTG Pactual

Assuming the 90 days trading horizon Vbi Consumo Essencial is expected to under-perform the BTG Pactual. But the fund apears to be less risky and, when comparing its historical volatility, Vbi Consumo Essencial is 2.37 times less risky than BTG Pactual. The fund trades about -0.17 of its potential returns per unit of risk. The BTG Pactual Logstica is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  9,650  in BTG Pactual Logstica on September 27, 2024 and sell it today you would lose (250.00) from holding BTG Pactual Logstica or give up 2.59% of portfolio value over 90 days.

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

Vbi Consumo Essencial  vs.  BTG Pactual Logstica

Vbi Consumo Essencial

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vbi Consumo Essencial are ranked lower than 4 (%) 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.

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.

Pair Trading with Vbi Consumo and BTG Pactual

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

The idea behind Vbi Consumo Essencial and BTG Pactual Logstica 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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.