Correlation Between Malls Brasil and BTG Pactual

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

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

Diversification Opportunities for Malls Brasil and BTG Pactual

0.03

Correlation Coefficient

Malls Brasil  BTG Pactual

Significant diversification

The 3 months correlation between Malls and BTG is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Malls Brasil 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 Malls Brasil 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 Malls Brasil 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 Malls Brasil i.e., Malls Brasil and BTG Pactual go up and down completely randomly.

Pair Corralation between Malls Brasil and BTG Pactual

Assuming the 90 days trading horizon Malls Brasil Fundo is expected to generate 1.22 times more return on investment than BTG Pactual. However, Malls Brasil is 1.22 times more volatile than BTG Pactual Logstica. It trades about 0.03 of its potential returns per unit of risk. BTG Pactual Logstica is currently generating about -0.01 per unit of risk. If you would invest  9,923  in Malls Brasil Fundo on April 20, 2025 and sell it today you would earn a total of  101.00  from holding Malls Brasil Fundo or generate 1.02% return on investment over 90 days.

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

Malls Brasil Fundo  vs.  BTG Pactual Logstica

Malls Brasil Fundo

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Malls Brasil Fundo are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong essential indicators, Malls Brasil 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

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 Malls Brasil and BTG Pactual

The main advantage of trading using opposite Malls Brasil and BTG Pactual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malls Brasil 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 Malls Brasil 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.