Correlation Between Amazon and Braskem SA
Can any of the company-specific risk be diversified away by investing in both Amazon and Braskem SA 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 Amazon and Braskem SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Braskem SA, you can compare the effects of market volatilities on Amazon and Braskem SA 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 Amazon with a short position of Braskem SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Braskem SA.
Diversification Opportunities for Amazon and Braskem SA
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amazon and Braskem is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Braskem SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Braskem SA and Amazon 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 Amazon Inc are associated (or correlated) with Braskem SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Braskem SA has no effect on the direction of Amazon i.e., Amazon and Braskem SA go up and down completely randomly.
Pair Corralation between Amazon and Braskem SA
Assuming the 90 days trading horizon Amazon Inc is expected to generate 0.73 times more return on investment than Braskem SA. However, Amazon Inc is 1.38 times less risky than Braskem SA. It trades about 0.12 of its potential returns per unit of risk. Braskem SA is currently generating about -0.11 per unit of risk. If you would invest 4,652 in Amazon Inc on August 30, 2024 and sell it today you would earn a total of 1,436 from holding Amazon Inc or generate 30.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon Inc vs. Braskem SA
Performance |
| Timeline |
| Amazon Inc |
| Braskem SA |
Amazon and Braskem SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Braskem SA
The main advantage of trading using opposite Amazon and Braskem SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Braskem SA 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 Braskem SA will offset losses from the drop in Braskem SA's long position.| Amazon vs. Spotify Technology SA | Amazon vs. Take Two Interactive Software | Amazon vs. The Trade Desk | Amazon vs. UnitedHealth Group Incorporated |
| Braskem SA vs. Braskem SA | Braskem SA vs. Braskem SA | Braskem SA vs. Bradespar SA | Braskem SA vs. Unipar Carbocloro SA |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |