Correlation Between Braskem SA and Centerra Gold
Can any of the company-specific risk be diversified away by investing in both Braskem SA and Centerra Gold 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 Centerra Gold 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 Centerra Gold, you can compare the effects of market volatilities on Braskem SA and Centerra Gold 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 Centerra Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braskem SA and Centerra Gold.
Diversification Opportunities for Braskem SA and Centerra Gold
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Braskem and Centerra is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA Class and Centerra Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centerra Gold 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 Centerra Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centerra Gold has no effect on the direction of Braskem SA i.e., Braskem SA and Centerra Gold go up and down completely randomly.
Pair Corralation between Braskem SA and Centerra Gold
Considering the 90-day investment horizon Braskem SA Class is expected to under-perform the Centerra Gold. But the stock apears to be less risky and, when comparing its historical volatility, Braskem SA Class is 1.05 times less risky than Centerra Gold. The stock trades about -0.36 of its potential returns per unit of risk. The Centerra Gold is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 710.00 in Centerra Gold on August 30, 2024 and sell it today you would lose (111.00) from holding Centerra Gold or give up 15.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Braskem SA Class vs. Centerra Gold
Performance |
| Timeline |
| Braskem SA Class |
| Centerra Gold |
Braskem SA and Centerra Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braskem SA and Centerra Gold
The main advantage of trading using opposite Braskem SA and Centerra Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braskem SA position performs unexpectedly, Centerra Gold 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 Centerra Gold will offset losses from the drop in Centerra Gold's long position.| Braskem SA vs. Valhi Inc | Braskem SA vs. Huntsman | Braskem SA vs. Lsb Industries | Braskem SA vs. Westlake Chemical Partners |
| Centerra Gold vs. Gold Fields Ltd | Centerra Gold vs. Eldorado Gold Corp | Centerra Gold vs. Osisko Gold Ro | Centerra Gold vs. SSR Mining |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |