Correlation Between BS2 ALLINVESTMENTS and BTG Pactual

Can any of the company-specific risk be diversified away by investing in both BS2 ALLINVESTMENTS 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 BS2 ALLINVESTMENTS and BTG Pactual into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BS2 ALLINVESTMENTS FDO and BTG Pactual Logstica, you can compare the effects of market volatilities on BS2 ALLINVESTMENTS 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 BS2 ALLINVESTMENTS with a short position of BTG Pactual. Check out your portfolio center. Please also check ongoing floating volatility patterns of BS2 ALLINVESTMENTS and BTG Pactual.

Diversification Opportunities for BS2 ALLINVESTMENTS and BTG Pactual

-0.77

Correlation Coefficient

BS2 ALLINVESTMENTS  BTG Pactual

Pay attention - limited upside

The 3 months correlation between BS2 and BTG is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding BS2 ALLINVESTMENTS FDO 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 BS2 ALLINVESTMENTS 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 BS2 ALLINVESTMENTS FDO 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 BS2 ALLINVESTMENTS i.e., BS2 ALLINVESTMENTS and BTG Pactual go up and down completely randomly.

Pair Corralation between BS2 ALLINVESTMENTS and BTG Pactual

Assuming the 90 days trading horizon BS2 ALLINVESTMENTS FDO is expected to generate 0.21 times more return on investment than BTG Pactual. However, BS2 ALLINVESTMENTS FDO is 4.84 times less risky than BTG Pactual. It trades about 0.22 of its potential returns per unit of risk. BTG Pactual Logstica is currently generating about -0.16 per unit of risk. If you would invest  7,598  in BS2 ALLINVESTMENTS FDO on September 21, 2024 and sell it today you would earn a total of  139.00  from holding BS2 ALLINVESTMENTS FDO or generate 1.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	85.71%
Values	Daily Returns

BS2 ALLINVESTMENTS FDO  vs.  BTG Pactual Logstica

BS2 ALLINVESTMENTS FDO

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BS2 ALLINVESTMENTS FDO are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, BS2 ALLINVESTMENTS 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 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.

Pair Trading with BS2 ALLINVESTMENTS and BTG Pactual

The main advantage of trading using opposite BS2 ALLINVESTMENTS and BTG Pactual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BS2 ALLINVESTMENTS 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 BS2 ALLINVESTMENTS FDO 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.