Correlation Between Braskem SA and Avient Corp
Can any of the company-specific risk be diversified away by investing in both Braskem SA and Avient 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 Braskem SA and Avient Corp 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 Avient Corp, you can compare the effects of market volatilities on Braskem SA and Avient 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 Braskem SA with a short position of Avient Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braskem SA and Avient Corp.
Diversification Opportunities for Braskem SA and Avient Corp
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Braskem and Avient is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA Class and Avient Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avient Corp 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 Avient Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avient Corp has no effect on the direction of Braskem SA i.e., Braskem SA and Avient Corp go up and down completely randomly.
Pair Corralation between Braskem SA and Avient Corp
Considering the 90-day investment horizon Braskem SA Class is expected to under-perform the Avient Corp. In addition to that, Braskem SA is 1.35 times more volatile than Avient Corp. It trades about -0.34 of its total potential returns per unit of risk. Avient Corp is currently generating about 0.24 per unit of volatility. 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 |
Braskem SA Class vs. Avient Corp
Performance |
| Timeline |
| Braskem SA Class |
| Avient Corp |
Braskem SA and Avient Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braskem SA and Avient Corp
The main advantage of trading using opposite Braskem SA and Avient Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braskem SA position performs unexpectedly, Avient 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 Avient Corp will offset losses from the drop in Avient Corp's long position.| Braskem SA vs. Valhi Inc | Braskem SA vs. Huntsman | Braskem SA vs. Lsb Industries | Braskem SA vs. Westlake Chemical Partners |
| Avient Corp vs. Axalta Coating Systems | Avient Corp vs. H B Fuller | Avient Corp vs. Quaker Chemical | Avient Corp vs. Cabot |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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