Correlation Between BTG Pactual and FirstEnergy Corp

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

Diversification Opportunities for BTG Pactual and FirstEnergy Corp

0.0

Correlation Coefficient

BTG Pactual  FirstEnergy Corp

Pay attention - limited upside

The 3 months correlation between BTG and FirstEnergy is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BTG Pactual Logstica and FirstEnergy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FirstEnergy Corp 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 FirstEnergy Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FirstEnergy Corp has no effect on the direction of BTG Pactual i.e., BTG Pactual and FirstEnergy Corp go up and down completely randomly.

Pair Corralation between BTG Pactual and FirstEnergy Corp

If you would invest  0.00  in FirstEnergy Corp on March 22, 2024 and sell it today you would earn a total of  0.00  from holding FirstEnergy Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	2.56%
Values	Daily Returns

BTG Pactual Logstica  vs.  FirstEnergy Corp

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 basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

FirstEnergy Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FirstEnergy Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, FirstEnergy Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BTG Pactual and FirstEnergy Corp

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

The idea behind BTG Pactual Logstica and FirstEnergy Corp 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.

Check out your portfolio center.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.