Correlation Between Fundo Investec and BTG Pactual

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

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

Diversification Opportunities for Fundo Investec and BTG Pactual

0.63

Correlation Coefficient

Fundo Investec  BTG Pactual

Poor diversification

The 3 months correlation between Fundo and BTG is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Fundo Investec IMB 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 Fundo Investec 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 Fundo Investec IMB 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 Fundo Investec i.e., Fundo Investec and BTG Pactual go up and down completely randomly.

Pair Corralation between Fundo Investec and BTG Pactual

Assuming the 90 days trading horizon Fundo Investec IMB is expected to under-perform the BTG Pactual. In addition to that, Fundo Investec is 1.79 times more volatile than BTG Pactual Logstica. It trades about -0.09 of its total potential returns per unit of risk. BTG Pactual Logstica is currently generating about 0.0 per unit of volatility. If you would invest  9,651  in BTG Pactual Logstica on October 13, 2024 and sell it today you would lose (100.00) from holding BTG Pactual Logstica or give up 1.04% of portfolio value over 90 days.

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

Fundo Investec IMB  vs.  BTG Pactual Logstica

Fundo Investec IMB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fundo Investec IMB has generated negative risk-adjusted returns adding no value to fund investors. Despite weak performance in the last few months, the Fund's essential indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing 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 somewhat strong essential indicators, BTG Pactual is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fundo Investec and BTG Pactual

The main advantage of trading using opposite Fundo Investec and BTG Pactual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fundo Investec 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 Fundo Investec IMB 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.