Correlation Between Fator Verit and BTG Pactual

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

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

Diversification Opportunities for Fator Verit and BTG Pactual

0.91

Correlation Coefficient

Fator Verit  BTG Pactual

Almost no diversification

The 3 months correlation between Fator and BTG is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Fator Verit Fundo 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 Fator Verit 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 Fator Verit Fundo 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 Fator Verit i.e., Fator Verit and BTG Pactual go up and down completely randomly.

Pair Corralation between Fator Verit and BTG Pactual

Assuming the 90 days trading horizon Fator Verit Fundo is expected to under-perform the BTG Pactual. But the fund apears to be less risky and, when comparing its historical volatility, Fator Verit Fundo is 1.05 times less risky than BTG Pactual. The fund trades about -0.2 of its potential returns per unit of risk. The BTG Pactual Logstica is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest  10,267  in BTG Pactual Logstica on August 30, 2024 and sell it today you would lose (655.00) from holding BTG Pactual Logstica or give up 6.38% of portfolio value over 90 days.

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

Fator Verit Fundo  vs.  BTG Pactual Logstica

Fator Verit Fundo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fator Verit 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.

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.

Pair Trading with Fator Verit and BTG Pactual

The main advantage of trading using opposite Fator Verit and BTG Pactual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fator Verit 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 Fator Verit Fundo 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..