Correlation Between Braskem SA and Aegon NV
Can any of the company-specific risk be diversified away by investing in both Braskem SA and Aegon NV 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 Braskem SA and Aegon NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Braskem SA Class and Aegon NV ADR, you can compare the effects of market volatilities on Braskem SA and Aegon NV 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 Braskem SA with a short position of Aegon NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braskem SA and Aegon NV.
Diversification Opportunities for Braskem SA and Aegon NV
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Braskem and Aegon is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA Class and Aegon NV ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegon NV ADR and Braskem SA 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 Braskem SA Class are associated (or correlated) with Aegon NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegon NV ADR has no effect on the direction of Braskem SA i.e., Braskem SA and Aegon NV go up and down completely randomly.
Pair Corralation between Braskem SA and Aegon NV
Considering the 90-day investment horizon Braskem SA Class is expected to under-perform the Aegon NV. In addition to that, Braskem SA is 2.02 times more volatile than Aegon NV ADR. It trades about -0.02 of its total potential returns per unit of risk. Aegon NV ADR is currently generating about 0.06 per unit of volatility. If you would invest 442.00 in Aegon NV ADR on September 3, 2024 and sell it today you would earn a total of 207.00 from holding Aegon NV ADR or generate 46.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Braskem SA Class vs. Aegon NV ADR
Performance |
| Timeline |
| Braskem SA Class |
| Aegon NV ADR |
Braskem SA and Aegon NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braskem SA and Aegon NV
The main advantage of trading using opposite Braskem SA and Aegon NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braskem SA position performs unexpectedly, Aegon NV 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 Aegon NV will offset losses from the drop in Aegon NV's long position.| Braskem SA vs. Valhi Inc | Braskem SA vs. Huntsman | Braskem SA vs. Lsb Industries | Braskem SA vs. Westlake Chemical Partners |
| Aegon NV vs. Global Indemnity PLC | Aegon NV vs. Erie Indemnity | Aegon NV vs. AMERISAFE | Aegon NV vs. Diamond Hill 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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