Correlation Between Avient Corp and Braskem SA
Can any of the company-specific risk be diversified away by investing in both Avient Corp 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 Avient Corp and Braskem SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avient Corp and Braskem SA Class, you can compare the effects of market volatilities on Avient Corp 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 Avient Corp with a short position of Braskem SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avient Corp and Braskem SA.
Diversification Opportunities for Avient Corp and Braskem SA
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Avient and Braskem is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Avient Corp and Braskem SA Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Braskem SA Class and Avient Corp 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 Avient Corp 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 Class has no effect on the direction of Avient Corp i.e., Avient Corp and Braskem SA go up and down completely randomly.
Pair Corralation between Avient Corp and Braskem SA
Given the investment horizon of 90 days Avient Corp is expected to generate 0.74 times more return on investment than Braskem SA. However, Avient Corp is 1.35 times less risky than Braskem SA. It trades about 0.24 of its potential returns per unit of risk. Braskem SA Class is currently generating about -0.34 per unit of risk. If you would invest 4,661 in Avient Corp on September 1, 2024 and sell it today you would earn a total of 464.00 from holding Avient Corp or generate 9.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avient Corp vs. Braskem SA Class
Performance |
| Timeline |
| Avient Corp |
| Braskem SA Class |
Avient Corp and Braskem SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avient Corp and Braskem SA
The main advantage of trading using opposite Avient Corp and Braskem SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avient Corp 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.| Avient Corp vs. Axalta Coating Systems | Avient Corp vs. H B Fuller | Avient Corp vs. Quaker Chemical | Avient Corp vs. Cabot |
| Braskem SA vs. Valhi Inc | Braskem SA vs. Huntsman | Braskem SA vs. Lsb Industries | Braskem SA vs. Westlake Chemical Partners |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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